TPG targets up to $4.5b for seventh Asia fund

A hard cap has not yet been set, according to sources familiar with the situation. Should the new fund fall within its target range it would return TPG to the territory it occupied in Fund V, which closed at $4.25 billion in 2008 - at the time the largest pool of private equity capital ever raised for Asia. The record now stands at $6 billion.

New Mexico State Investment Council has committed $100 million to Fund VII, having invested the same amount in Fund VI. A presentation published by the pension fund indicates that TPG has deployed $8.1 billion in Asia across 69 investments in 12 countries since entering the region in 1994, initially through Newbridge Capital, a joint venture with Blum Capital. Realizations stand at $12.4 billion.

As of December 2015, the most recent performance report by New Mexico State Investment Council, Fund VI had delivered a net multiple of 0.97x and a net IRR of -3.5%. Data from California Public Employees' Retirement System (CalPERS) indicates that Fund V had generated a multiple of 1.3x and a net IRR of 5.5% as of June 2016.

TPG's Asia team comprises over 50 investment professionals - plus 13 dedicated operational professionals - led by three managing partners, Tim Dattels, Puneet Bhatia and Ganen Sarvananthan. During the last fundraise, Dattels relocated to Asia to head up operations alongside Ben Gray as Stephen Peel stepped back. This time around Gray is leaving to launch his own Australia fund. The new Australia head is Joel Thickins, formerly of CHAMP Private Equity. In addition, TPG hired Sanghoon Lee from Morgan Stanley Private Equity Asia to lead investments in Korea.

The new fund will target buyouts, growth equity, structured transactions and platform builds in China, India, Southeast Asia, Australia and Korea. There are four core sectors: financial services, healthcare, consumer demand growth and the new economy areas of technology, media and telecom (TMT). Of the $8.1 billion TPG has invested in Asia, financial services accounts for $2.7 billion, healthcare for $900 million, and consumer for $2.3 billion.

TMT is a more recent focus but it is already represented in the PE firm's portfolio through the likes of Singapore online property platform PropertyGuru and China bike-sharing business Mobike. Other recent general investment activity includes the acquisition last October of Hong Kong telecom services provider Wharf T&T for $1.2 billion alongside MBK Partners, while in November TPG secured a partial exit from Australian poultry producer Ingham's Enterprises as part of a $457 million IPO.

TPG is coming to market at the same time as KKR, which is targeting up to $7 billion for its third Asia vehicle. Bain Capital and PAG Asia Capital closed their most recent funds at the end of 2015, raising $3 billion (plus a $250 million GP commitment) and $3.66 billion, respectively. Earlier the same year, Baring Private Equity Asia raised $3.99 billion and RRJ Capital secured $4.5 billion. More recently, MBK Partners closed its fourth North Asia fund at $4.1 billion.

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• Topics
• Buyout
• Fundraising
• GPs
• Consumer
• Financials
• Technology
• Healthcare
• TPG Capital
• Asia
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• New Mexico State Investment Council