AppId is over the quota
AppId is over the quota
By Stephen Aldred
HONG KONG | Fri Oct 14, 2011 10:47am BST
HONG KONG (Reuters) - Global private equity firm TPG Capital is preparing to launch a $4-5 billion fund in mid October to invest in Asia, which would be the largest fund focused on the region since the global downturn, two sources said.
TPG, a U.S.-based firm founded in 1992, currently invests in Asia from a $19.8 billion global fund and its $4.25 billion regional fund TPG Capital Partners V, which both raised their investment capital in 2008.
The news suggests investors have told TPG they have the appetite to invest in Asia, and equally that the private equity firm feels it can place those funds in the region over the typical five-year stretch taken to put capital to work.
It also suggests investors are willing to make longer-term investments in Asia at a time when financial markets are in turmoil over the euro zone's debt crisis and concern that the United States could be slipping into a recession.
Thomson Reuters data shows there is already around $70 billion of dry powder, or unused capital, allocated for private equity investments in Asia.
The sources have knowledge of the matter but declined to be identified because they are not authorised to talk to the media. TPG's external public relations advisers were unable to provide immediate comment.
The TPG Capital Partners V fund is around 75 percent invested, one of the sources said, which has encouraged TPG to start the new fund . The TPG Capital Partners V fund's limited partner investors include California Public Employees' Retirement System, Thomson Reuters data shows.
Current Asia investments by the firm, which has more than $48 billion in assets under management globally, include Comtec Solar (0712.HK) and Wumart Stores (1025.HK) in China, Shriram Transport Finance Co (SRTR.NS) and Lilliput Kidswear in India, and United Test & Assembly Centre in Singapore.
TPG's existing Asia fund is among the largest ever raised by private equity firms for the region, along with a $4.12 billion fund raised by CVC Capital Partners Asia in 2008, and Kohlberg Kravis Roberts' (KKR.N) $4 billion fund raised in 2007, data provider Preqin says.
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Private equity firms around the world have found it tougher to raise money since the global economic downturn in 2008, but CVC, KKR and TPG have been able to invest from their existing funds.
The largest regional fund raised since 2008 is Baring Private Equity Asia's $2.46 billion Fund V. That fund was raised in just five months and closed earlier this year, underlining the strength of limited partner appetite for investment in Asia.
Twenty-two percent of private equity funds currently raising investment capital globally have Asia Pacific as their primary focus, compared with just 9 percent in 2008, Preqin said in a recent report.
Asia now rivals Europe for investor dollars -- Europe accounts for 23 percent of funds raising capital.
Other funds are also set to test investor appetite for private equity investments in Asia.
Morgan Stanley Asia Private Equity is preparing to launch a new fund, which will be around the same size as its current $1.5 billion fund, two other sources told Reuters.
Morgan Stanley declined to comment.
TPG's investments span a variety of industries including technology, financial services, travel and entertainment, industrials, retail, consumer, media and communications, and healthcare.
(Reporting by Stephen Aldred; Editing by Jacqueline Wong and Neil Fullick)
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