CVC seeks $6b for latest Asia fund

Mergermarket, AVCJ’s sister publication, learned of the imminent launch from three sources familiar with the situation. One source said that Fund V would be more than 70% deployed by the end of the first quarter, having crossed the 60% threshold at the end of 2021. CVC declined to comment.

The private equity firm has five core sectors: consumer, financial services, healthcare, technology, media, and telecom (TMT), and business services. It typically targets control, co-control, and structured minority investments with enterprise values of USD 250m to USD 1.5bn.

Fund V, which closed above target in March 2020, represented a step-up from the USD 3.5bn raised for Fund IV. CVC said this reflected an expansion in its regional investment capabilities, notably the addition of an India office.

The same might be happening with Fund VI. Last year, the firm reactivated its Australia business, having excluded the country from the Fund IV mandate. Brett Sutton, formerly of Affinity Equity Partners, was recruited as Australian chairman and tasked with building a local team.

CVC has 64 investment professionals across offices in Bangkok, Hong Kong, Jakarta, Mumbai, Seoul, Shanghai, Singapore, Sydney, and Tokyo. Speaking to AVCJ last November, Hans Wang, a managing partner at the firm, identified being “very local” as a competitive advantage in the region. He also highlighted CVC’s tight sector focus, partnership strategy, and global platform.

“I think it’s important to leverage the global platform and expertise. Our partners want to know what we can bring to the table, whether that is experience from similar deals elsewhere or industry advisors and experts. For example, we’ve done well in healthcare globally and we see that in Asia as well,” Wang said.

Recent deals in the healthcare space include the acquisition of Xi’an Yikang Pharmacy, China’s eighth-largest pharmacy chain.

The firm has also been active in TMT, carving out the international business of China advertising agency BlueFocus Group and backing a take-private of gaming hardware provider Razer. There was another carve-out in consumer, which secured a majority stake in Japanese streetwear brand A Bathing Ape, while Affin Wang Asset Management was acquired in Malaysia.

In addition, CVC made a tentative USD 20bn offer for Toshiba before stepping back and awaiting guidance from the company’s board as to whether a privatisation was desirable.

The firm is arguably distinct in deliberately pursuing a partnership approach – where it executes minority-joint control deals with founders and family groups – and in having a dedicated regional team within its broader Asia team. The latter group focuses on Greater China ex-domestic China deals and anything with an international or cross-border element.

“We are origination-focused, so the team that originates a deal leads it. But there might be crossover with other country teams. We have three sector teams in Asia – financial services, TMT, and healthcare – and they have close ties to sector teams at the global level,” Wang added.

“Anyone who directly participates in a deal gets a share of the economics, based on their contribution, irrespective of where they sit.”

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• Topics
• Fundraising
• Buyout
• GPs
• Asia
• CVC Capital Partners
• Fundraising