TPG Capital gets $4.6 billion commitment, closes latest Asia-focused fund

  • TPG Capital Asia VII will largely pursue investments in China and India, followed by South-East Asia
  • TPG Capital Asia VII has committed over 40% capital across 12 firms, including Du Xiaoman, UPL and Pathology Asia

Mumbai: US private equity firm TPG Capital on Monday said it has closed its latest Asia-focused fund TPG Capital Asia VII with commitments of over $4.6 billion.

“With Asia VII, we will continue to invest in opportunities that reflect our differentiated investment strategy, deep sector expertise, and focus on operational improvement. We look forward to continuing to deliver value for our investors while helping to build great new companies across Asia," said Ganen Sarvananthan, co-managing partner for TPG Capital Asia. TPG had raised $3.3 billion for its previous Asia focused fund in 2014.

(Graphic by Vipul Sharma/Mint)

TPG Capital Asia VII has so far committed more than 40% of the capital across 12 companies, including Du Xiaoman, the consumer-lending, wealth management and payments platform spun out of Baidu; Pathology Asia Holdings, Healthscope’s Asian Pathology business that operates 39 labs across Singapore, Malaysia and Vietnam; UPL, a global leader in agricultural solutions; and Greencross Ltd, an ASX-listed integrated pet care platform in Australia.

Last year, TPG tied up with UPL Ltd for the latter’s acquisition of Arysta Lifescienes Inc for $4.2 billion.

TPG along with sovereign wealth fund ADIA, invested $1.2 billion in the transaction.

According to a person aware of the PE firm’s plans, the latest fund will largely pursue investments in China and India, followed by South-East Asia.

“The fund will have a multi-strategy and multi-platform approach to pursue a broad range of investments. It will focus on sectors such as financial services, healthcare, consumer and telecom, media and technology and new economy companies, while it will also focus on opportunistic investments in other industries," this person said on condition of anonymity.

TPG established its first Asia-dedicated fund in 1994. With offices in Beijing, Hong Kong, Mumbai, Seoul, Singapore and Melbourne, the Asia fund has approximately 50 investment professionals. The platform has invested $11 billion in 88 investments across 13 countries. Overall, TPG manages assets worth $103 billion globally. The American PE investor’s latest Asia fund adds to the growing interest institutional investors have shown in private equity investing in Asia.

Last year, American alternative asset manager The Carlyle Group announced the final close of its fifth Asia buyout fund Carlyle Asia Partners V (CAP V) at $6.55 billion. The CAP V fund exceeded its initial target of $5 billion and raised more than 65% more capital than its predecessor fund Carlyle Asia Partners IV.

The CAP V fund will invest in consumer and retail, financial services, telecommunications, media and technology (TMT), healthcare and industrials, Carlyle had said in a statement. Carlyle started investing in Asia in 1998.

Another American alternatives behemoth, Blackstone Group LP, announced in June 2018 the closure of two of its Asian funds at $9.4 billion. Blackstone closed its first Asia private equity fund at about $2.3 billion, while it separately raised $7.1 billion for its second regional “opportunistic" real estate fund.

In November, Mint reported that private equity firm KKR and Co. is gearing up to raise its maiden Asia-focused infrastructure fund.

In 2017, KKR raised $9.3 billion for investments in private equity transactions across the Asia Pacific region, under its KKR Asian Fund III.

According to alternatives investment tracker Preqin, Asia has seen a significant rise in private capital allocation from global alternatives investors across various strategies such as private equity, private debt, real estate and infrastructure.

“Geographically, the majority of dry powder is still targeting North America, although that proportion has been declining in recent years. However, a steadily increasing proportion of available capital is focused on Asia. The region accounted for 9% of total dry powder in 2006, but in 2018 this has doubled to 18%," said Preqin in a report in January.

The proportion of private capital dry powder targeting North America has fallen from 62% in 2006 to 55% in 2018, the report said.

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