Asian PE fundraising slips in 3Q as RMB vehicles struggle
Asian private equity fundraising reached $10.8 billion in the third quarter of 2012, continuing a downward trend that stretches back 12 months, according to provisional data from AVCJ Research. Renminbi-denominated fundraising experienced the most acute decline, falling to $1.5 billion from $6.4 billion the previous quarter.
More capital entered China-focused US dollar funds that their renminbi counterparts, reversing a trend that had been gathering pace over the last two years. US dollar vehicles attracted $1.8 billion in capital between July and September, largely thanks to a $1 billion first close from FountainVest China Growth Fund II and PAG Asia I adding $700 million to its corpus as it announced a final close of $2.4 billion.
In recent years, large renminbi funds - often government-backed and with particular sector or geographical focus - have featured prominently among the leading vehicles to reach a close in each quarter. This is not the case in the latest rankings. Only one renminbi fund, CICC Jia Tai Private Equity Fund, which achieved a final close of $783.3 million, appears in the top 10.
The China share of regional fundraising has fallen steadily over the course of 2012, from 76% in the first quarter to 48% in the second and 30% in the third.
Reduced activity on the renminbi front has to a certain extent been counterbalanced by the clutch of pan-regional funds currently in the market. In addition to PAG, Bain Capital reached a final close of $2.3 billion on its second Asia vehicle in the third quarter. This trend is likely to continue.
Private equity investment in Asia came to $16.1 billion between July and September, down slightly on the previous quarter, although more transactions are likely to be disclosed in coming weeks. China and South Korea recorded the biggest quarter-on-quarter gains, buoyed by a few large buyout deals.
The exit climate continues to build on momentum gathered in the previous quarter, with 78 deals generating $19.9 billion. Japan and Australia showed signs of increased activity as private equity firms look to dispose of assets acquired during the boom period of 2006-2007.
To receive a full set of data and analysis on private equity activity in Asia Pacific during the third quarter of 2012, please contact AVCJResearch@incisivemedia.com.
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