Baring Asia makes second close on Fund VIII, reaches $8.5b target

The GP told investors that the $8.5 billion capacity was “fully allocated,” without giving the exact amounts for the first and second closes, according to a source close to the situation. The same source added that $10 billion should be within reach for the final close. Two other sources said that approximately $8.5 billion had been raised to date. BPEA declined to comment.

Fund VIII launched earlier this year, less than 15 months after its predecessor closed on $6.5 billion. The compressed timeframe is a consequence of a protracted process last time.

BPEA pursues mid and large-cap buyouts across Asia as well as backing global companies that can benefit from Asian exposure. Favored sectors include healthcare, education, consumer, financial services, business and technology services, and industrials. The new fund will write checks of $150-500 million for companies with enterprise valuations of $500 million to $2 billion.

However, 10% of the corpus is likely to be deployed in growth-stage investments, underlining how large-cap buyout managers are seeking more minority deals in high-growth sectors. According to Employees’ Retirement System of Rhode Island (ERSRI), the larger growth-stage allocation will target a limited number of situations where BPEA has high conviction.

A presentation notes that 10% of Funds VI and VII went into opportunistic investments, defined as high-growth companies in core sectors and special situations driven by public market dislocations. Some minority deals are classified as corporate partnering, where Baring works in tandem with blue-chip companies. The allocation for this category is 6%.

Recent buyouts by the private equity firm include a $1.2 billion carve-out of Anglo-Indian conglomerate Hinduja Group’s healthcare services unit and the acquisition of Philippines-based outsourcing business Straive from Partners Group, adding to an already sizeable enterprise technology portfolio.

BPEA has also invested $150 million in growth round for Singapore-based game developer Virtuos and committed $400 million – alongside Alibaba Group – to The CrownX, which represents the combined consumer goods and grocery retail operations of Vietnam conglomerates Masan Group and Vingroup.

In terms of exits, approximately $8 billion in liquidity has been generated over the past 12 months from a dozen companies. Disclosed activity includes IPOs for online-to-offline healthcare platform JD Health and business process outsourcing (BPO) specialist Telus International, a full exit from Korean logistics player Logen, and partial exits from Lumenis, SAI Global, Clarivate Analytics, and Coforge.

Fund VII had generated a gross multiple of 1.9x and a net IRR of 52% as of June. The gross multiple and net IRR for Fund VI were 2.3x and 20%, with Fund V (2011) on 1.8x and 8%, and Fund IV (2007) on 2.2x and 9%.

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