CVC closes fifth Asia fund at $4.5b

The new vehicle, which launched in September 2018 with a target of $4 billion, will continue CVC’s strategy of pursuing control and partnership investments in core consumer and services sectors. The partnership approach is most evident in Southeast Asia, where the private equity firm has completed a string of minority-joint control deals with founders and family groups.

One of the three exits from Fund IV – which closed in May 2014 is now fully invested – fits this profile. CVC took a 30% interest in Indonesian sports retailer MAP Aktif Adiperskasa in 2015 and then reduced its stake last year following the company’s IPO. The other two exits were both in Japan. The GP listed broadband provider Arteria Networks in late 2018, making another partial exit, while cleaning and care services business Hitowa Holdings was sold to Polaris Private Equity.

CVC now has more than 50 investment professionals in Asia across offices in Hong Kong, Singapore, Tokyo, Seoul, Shanghai, Jakarta, Mumbai and Bangkok.

Of the 18 current portfolio companies in the region, 10 are based in Southeast Asia, spanning consumer-retail, healthcare, financial services, and bereavement services. The firm also owns an accommodating booking platform in Korea, a massage chain in Japan, a toll road operator in China, and regional or global serviced offices, currency trading, and legal process outsourcing businesses.

CVC said that Fund V attracted strong demand from new and existing institutional investors. LPs that have disclosed their involvement include British Columbia Investment Management Corporation, New York State Common Retirement Fund, Oregon Investment Council, Canada Pension Plan Investment Board (CPPIB).

Fund IV received 43.1% of its commitments from sovereign wealth funds, 27.5% from public pension funds, 16.2% from financial institutions, and 9.2% from fund-of-funds. North America and Asia Pacific-based investors each accounted for approximately 30% of the corpus, with Europe and the Middle East contributing 15.4% and 21.9%, respectively.

According to California State Teachers’ Retirement System (CalSTRS), as of September 2019, Fund IV was on a net IRR of 15.48%, better than its two predecessors. The IRRs for Fund II (2005 vintage, $1.9 billion) and Fund III (2007 vintage, $4.1 billion) were -5.2% and 13.14%. CVC raised $750 million for its first Asia vehicle in 2000 and delivered a net IRR of 31.4% and a net multiple of 2.2x.

CVC’s final close comes three months after Baring Private Equity Asia completed the fundraising process for its seventh vehicle with $6.5 billion in commitments. Two other pan-regional players are currently in the market, with KKR seeking $12.5 billion for its fourth fund and MBK Partners having set a hard cap of $6.5 billion for its fifth vehicle.

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• Topics
• Buyout
• Fundraising
• Greater China
• North Asia
• Southeast Asia
• GPs
• Asia
• CVC Capital Partners