PAG announces final close of $2.5b on Asia fund

The fund launched in November 2010 and reached a first close of $1.7 billion seven months later. Although capital raising activity officially ended in late June of this year, Weijian Shan (pictured), group chairman and CEO of PAG, told AVCJ that the fund was fully subscribed much earlier.

"We basically got the commitments for the entire fund we needed by June of 2011 when we did the first closing," he said. "But it wasn't until early this year when we closed those LPs who didn't make it to the first closing because their due diligence, process and documentation took longer."

Shan is well known in Asian private equity circles, having spent 12 years at Newbridge Capital and TPG Capital, but this is the first time he has raised a fund independently. He stressed that reputation alone doesn't cut it during the LP due diligence process. "They all carefully scrutinized the track records of our partners and evaluated our strategy, our organization, our team and our underwriting policies and processes."

Shan added that the fundraising environment in general is tough and institutional players are very cautious and selective in their commitments.

More than 90% of the LP base comprises large institutional investors, including sovereign wealth funds, pension funds and financial institutions.

It was previously reported that the California Public Employees' Retirement System (CalPERS) has committed $100 million to PAG Asia I. Separately, market sources informed AVCJ that the LP base is relatively concentrated for a large-cap GP, with around 20 investors in total.

Three investments have been disclosed so far. The fund committed $250 million to the management-led privatization of NASDAQ-listed mobile handset retailer Funtalk China Holdings; it bought $300 million worth of shares as a cornerstone investor in Haitong Securities' Hong Kong IPO; and it completed a $250 million buyout of Shaanxi-based Bicon Pharmaceuticals Holdings.

News of PAG's successful fundraise follows an announcement by Bain Capital in July that it had reached a final close of $2.3 billion on its second Asia-focused vehicle, double the size of its predecessor.

A number of other leading PE firms are currently in the market raising regional funds. KKR reached the halfway point on its $6 billion second fund in June, while TPG Capital and The Carlyle Group are said to be seeking $4 billion and $3.5 billion, respectively. Then there is RRJ Capital, which has targeted up to $5 billion, nearly twice the size of its previous fund.

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• Topics
• Fundraising
• Greater China
• Buyout
• Fundraising
• China
• Asia
• PAG
• buyout