TPG closes seventh Asia fund at $4.6b

The GP launched with a target of $4.5 billion and then set a hard cap of $5 billion. Towards the end of last year, a group of secondary investors led by Lexington Partners committed capital to Fund VII as part of a tender offer that saw them take out existing positions in TPG’s fifth and sixth vehicles. The transaction represented a total capital commitment of around $1 billion.

Other disclosed LP commitments have come from the likes of Canada’s Autorité des marchés financiers (AMF), California Public Employees’ Retirement System (CalPERS), Korea Investment & Securities, New Mexico State Investment Council, NH Financial Group, and Teacher Retirement System of Texas.

The most recent investment from Fund VII is a buyout of Australian pet care company Greencross, which agreed to a take-private at a valuation of A$970 million ($698 million). It is one of three Australian deals, alongside the A$279 million acquisition of Healthscope’s pathology assets and the A$392 million purchase of clinical trials specialist Novotech.

TPG’s activity elsewhere in the region includes participation in the $1.9 billion spin-out of Du Xiao Man, Baidu’s financial services unit, and teaming up with Abu Dhabi Investment Authority (ADIA) and India’s UPL Corporation in a $4.2 billion acquisition of agrochemicals manufacturer Arysta LifeScience. The deal saw TPG and ADIA take equity stakes in UPL.

“With Asia VII, we will continue to invest in opportunities that reflect our differentiated investment strategy, deep sector expertise, and focus on operational improvement. We look forward to continuing to deliver value for our investors while helping to build great new companies across Asia,” Ganen Sarvananthan, TPG’s Asia co-managing partner, said in a statement.

The private equity firm, which has been active in Asia for 25 years, has 50 investment professionals based in Beijing, Hong Kong, Mumbai, Seoul, Singapore, and Melbourne. It has invested $11 billion in 88 investments across 13 countries. There is a particular focus on financial services, healthcare, consumer, and technology, media and telecom.

Fund VII is TPG’s largest Asia vehicle to date. The firm closed its sixth fund at $3.3 billion in 2014 after a challenging two-year-plus process. Six years earlier, Fund V closed at $4.25 billion – at the time the largest pool of private equity capital ever raised for Asia. However, the corpus ended up at $3.8 billion as some LPs were released from their commitments following the global financial crisis.

According to disclosures from Canada Pension Plan Investment Board, as of March 2018, Fund V was 95% drawn and the distributions to paid-in (DPI) and total value to paid-in (TVPI) multiples were 0.97x and 1.4x. Fund VI was 89% drawn and the DPI and TVPI were 0.25x and 1.18x.

The last 12 months have seen record commitments to pan-Asian funds. A total of $139.4 billion was committed to the asset class in 2018, falling to $100.8 billion if renminbi-denominated activity is excluded. The top 10 non-renminbi funds raised were responsible for 48%. Eight are pan-Asian, seven were final closes and six had previous vintages. The average increase in fund size on the last vintage ranged from 33% to 152%.

Hillhouse Capital raised $10.6 billion for the largest fund ever seen in the region. Meanwhile, the likes of Affinity Equity Partners, PAG Asia Capital, and Bain Capital each took no more than five months to close their latest vehicles at $6 billion, $6 billion, and $4.65 billion, respectively.

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• Topics
• Fundraising
• Buyout
• GPs
• Asia
• TPG Capital