New York-based international private equity firm Warburg Pincus & Co. is coming back to market with a $5 billion fund dubbed Warburg Pincus Private Equity VIII to make growth investments. Warburg?s latest fund raising effort comes at a time when mega funds are seemingly a dime a dozen, and in some cases funds such as Hicks, Muse, Tate & Furst are scaling back their targets.
Sources close to the firm said that initial responses from past investors have been “gratifying” and that the fund?s anticipated first closing is slated for early summer and its final closing for mid-fall. The fund will make the bulk of its investments the U.S. but will also look abroad in Europe and Asia for investment opportunities.
Last October, the firm closed on a $2.5 billion international fund to invest alongside its existing $5 billion Warburg Pincus Equity Partners LP fund. Warburg Pincus raised its main fund in 1998.
It can?t be ignored that some mega fundraisers are hitting or even topping their initial targets. Thomas H. Lee Co. recently closed on $6.1 billion to lay claim to the crown that is being relayed with each passing quarter.
Other funds in the market that also have potential to eclipse Tom Lee?s include Forstmann Little & Co., Welsh, Carson, Anderson & Stowe Kohlberg Kravis Roberts & Co. and DLJ Merchant Banking. And not to be left out, J.P. Morgan Chase & Co. earlier this month re-committed to seek $5 billion of capital from outside investors and add $8 billion of its own equity to that sum for its $13 billion Chase Capital Global 2001 Fund LP.
Warburg Pincus is reportedly considering using the placement arm of Credit Suisse First Boston, which owns a 20% stake in the firm?s management company. Merrill Lynch & Co. placed Warburg Pincus? two previous funds.
Warburg Pincus in December committed an estimated $370 million for a 20% stake in LG Capital Services Corp., representing the firm?s largest investment in Asia to date.
Hung Tran can be contacted at Story Feedback.