AVCJ

PAG to make first and final close of $6b on third Asia fund

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PAG Asia Capital is set to make a first and final close on its third pan-regional fund on November 15 at the hard cap of $6 billion. The vehicle has been in the market for approximately six months, having set an initial target of $4.5 billion.

Details of the fundraising were disclosed to AVCJ by sources familiar with the situation. PAG declined to comment.

The private equity firm's previous fundraise was similarly swift: it took about eight months to complete a first and final close of $3.66 billion in December 2015. The PAG private equity team, which was established in 2010 by Weijian Shan, formerly of TPG Capital, focuses on large-scale buyouts, control deals, and structured minority investments.

Recent activity includes participation in a $1.59 billion acquisition of assets held by bankrupt Japanese auto safety equipment manufacturer Takata Corporation led by Chinese-owned Key Safety Systems. The GP is also closing in on a sizeable liquidity event, with music streaming business Tencent Music Entertainment Group (TME) preparing for a US IPO. It took a stake in TME after Tencent acquired one of its portfolio companies, China Music Corporation, in 2016.

PAG's fundraise continues a wider trend that has seen top-tier managers accumulate ever-larger pools of capital for deployment in Asia. At the start of the year, Affinity Equity Partners closed its fifth regional vehicle at $6 billion, moving up from $3.8 billion. This was followed by The Carlyle Group raising $6.55 billion for its fifth Asia buyout fund. This compares to $3.9 billion for Fund IV.

Two months ago, Hillhouse Capital completed the largest fundraise seen in the region, its $10.6 billion surpassing the $9.3 billion KKR raised for its third pan-regional vehicle last year. Baring Private Equity Asia is still in the market, having set a $5.5 billion target for its latest fund and then reaching a first close of $4.5 billion in July. The hard cap has been set at $6.5 billion, according to industry sources.

PAG Asia Capital is the PE unit of PAG, one of Asia's largest independent alternative asset firms with $30 billion in capital under management. It covers absolute returns and real estate as well as private equity. The Blackstone Group's Strategic Capital Holdings Fund acquired a minority interest in PAG earlier this year for an undisclosed sum.

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