Warburg Pincus raises $11.2b for global fund

Warburg Pincus Private Equity XI received commitments from leading public and private pension funds, sovereign wealth funds, insurance companies, foundations, endowments and high net worth individuals. The fund will focus on businesses at all stages of development from start-ups to buyouts, targeting the energy, financial services, healthcare, technology, media and telecom, and consumer, industrial and services sectors.

"This successful fundraise, in a challenging environment, was driven by strong support from both existing and new investors. We see this success as a clear endorsement by our investors of our global growth investing model," said Charles R. Kaye, co-president of Warburg Pincus. Kaye will be speaking at the AVCJ China Forum, which takes place on May 30-31 in Beijing.

The private equity firm invested more than $2.3 billion in 28 new companies and made follow-on investments in several existing portfolio companies in 2012. It distributed $6.2 billion to investors over the course of the year, and a further $3 billion in the first quarter of 2013. Investments included a $200 million commitment to China Auto Rental, while InTime, a Chinese department store chain, and India's Kotak Mahindra were among the exits.

Warburg Pincus' vehicle exceeds recent fundraises by Silver Lake and Advent International, which accumulated $10.3 billion and $10.8 billion, respectively. Blackstone Capital Partners VI, which closed at $16.1 billion in January 2012 after about four years on the road, remains the largest post-global financial crisis fundraise.

Like many GPs, Warburg Pincus is believed to have comprised on the traditional 2/20 fee structure. According to the New Jersey Division of Investment, the firm is charging a management fee of 1-1.3%, although it will take the standard 20% carried interest. Reuters added that Warburg Pincus differs from many of its rivals in rarely charging fees when buying companies, advising portfolio companies or arranging financing.

Preqin data show that 129 funds reached a final close in the first quarter of 2013, raising a total of $67 billion, down from 203 funds and $79 billion a year ago. Global buyout firms' fortunes appear mixed, with The Carlyle Group expecting to exceed the $10 billion target for its latest US buyout fund, while the likes of Permira and Apax Partners have reduced targets for their latest global vehicles.

The situation parallels that of Asia where 36 funds reached a close - not specifically a final close - in the first three months of 2013, raising a total of $7.1 billion. This exceeds the $6.7 billion amassed in the final quarter of 2012 but is well down on the $12.8 billion received by 80 funds in the first quarter of 2012. Most regional buyout funds are expected to reach their targets, although the likes of KKR appear to be moving faster than Carlyle and TPG Capital.

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• Topics
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• Warburg Pincus Asia