Baring sets $5.5b target for latest pan-Asian fund

The planned increase in fund size on the previous vintage is consistent with most other pan-Asian players. Affinity Equity Partners closed its fifth fund at $6 billion in January, having raised $3.8 billion for its fourth vehicle, while KKR’s third pan-Asian fund came in at $9.3 billion last year, a 55% increase on Fund II. The Carlyle Group has set a hard cap of $6.5 billion for its latest regional buyout fund, having reached a first close of $4.5 billion last October. The previous fund was $3.9 billion.

Baring disclosed its target on opening the data room for Fund VII, according to sources familiar with the situation. The private equity firm was said to have previously told LPs that it may seek around $6 billion. The last fundraising process was rapid and oversubscribed. Baring set a target of $3 billion for Fund VI and reached a first close of $3.2 billion in October 2014, four months after launch. The firm ended up increasing the hard cap to reach $3.98 billion.

Last July, Baring completed the first exit from Fund VI, selling its stake in Japanese home improvement center operator Joyful Honda for JPY56.6 billion ($513 million) by participating in a tender offer launched by the company. The deal generated a gross IRR of around 45%. Another exit came last month, with the sale of Halla Cement for $723 million, giving the GP a 2.4x multiple and a 70% IRR.

Joyful Honda also represented the first joint investment between the firm’s private equity and real estate funds. Baring has broadened its business scope in recent years, closing a debut real estate fund at $365 million in March 2015 and also entering the credit space in India. In addition, it sold a 15% stake in the GP to Affiliated Managers Group (AMG) for an undisclosed sum.

Founded in 1997, Baring has more than $11 billion in committed capital and employs over 150 people. The firm’s geographical footprint and its operational resources have expanded over the years and there are now offices in Hong Kong, China, India, Indonesia, Japan, and Singapore. On the private equity side, it claims to have generated more than 50 exits and returned $4 billion in cash to LPs since inception.

The private equity strategy involves sponsoring buyouts and providing growth capital to companies for expansion or acquisitions. Recent investment activity includes the acquisition – in conjunction with CITIC Capital – of China-based English language training provider Wall Street English from Pearson.

Education is a strong theme across the GP’s portfolio. Last year, it also partnered with Canada Pension Plan Investment Board (CPPIB) on a $4.3 billion privatization of Nord Anglia Education. Baring already owned a majority stake in the company, having taken it public in the US in 2014. The deal, which featured new equity from Fund VI, took out positions held by Funds III and IV.

• Tweet  
• Facebook  
• LinkedIn  
• Google plus  
• Save this article  
• Send to  

• Topics
• Fundraising
• GPs
• Buyout
• Asia
• Baring Private Equity Asia