AVCJ

Baring Asia hits final close on eighth pan-regional fund

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Baring Private Equity Asia (BPEA), which agreed to merge with EQT earlier this year, has closed its eighth pan-regional fund with commitments of USD 11.2bn.

The final total was first reported by Bloomberg and has since been confirmed to AVCJ by a source close to the situation. BPEA declined to comment.

The fund launched last year with a target of USD 8.5bn, a step up from the USD 6.5bn raised in the previous vintage. As of October 2021, there had been two incremental closes and commitments were around the USD 8.5bn mark. It was suggested at the time by a source close to the situation that USD 10bn should be in reach for the final close.

BPEA's latest offering will be the second large-cap final close of the year to date, following The Blackstone Group's announcement that it had raised USD 6.4bn for its second pan-regional fund. Several other managers are currently in the market, with The Carlyle Group, CVC Capital Partners, and Bain Capital targeting USD 8.5bn, USD 6bn, and USD 5bn, respectively.

A group of secondary investors led by Goldman Sachs Asset Management has joined the LP roster for BPEA's eighth fund after completing a stapled secondary of nearly USD 900m, which also saw them take out positions in Funds V and VI. The Fund VIII contribution was around USD 270m.

Other LPs that have disclosed their participation in Fund VIII include Illinois Municipal Retirement Fund, Employees' Retirement System of Rhode Island, Arizona Public Safety Personnel Retirement System, and Canada Pension Plan Investment Board (CPPIB). There are 180 investors in total, of which 70 are newcomers. The GP commitment is 6%.

Under the terms of the merger agreement, EQT is paying EUR 6.8bn (USD 7.5bn) in cash and stock for 100% of BPEA's management company and the rights to carried interest from some current and all future funds. It will receive a 35% share of the Fund VIII carry.

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

However, 10% of the corpus is likely to be deployed in growth-stage investments, with additional capital earmarked for corporate partnering where BPEA works in tandem with blue-chip companies.

"When you are organised around sectors, in addition to looking for buyout opportunities, you pay attention to what's happening in other types of investments or companies. If you don't do that, you risk getting blindsided," Jean Eric Salata, CEO of BPEA, told AVCJ last year.

"Sometimes, we see opportunities from a top-down perspective, but control isn't available, so we combine our buyout strategy with a very selective growth or minority strategy."

Recent activity ranges from a take-private of Taiwan-listed contact lens manufacturer Ginko International at a valuation of USD 980m to a USD 10m commitment to Hong Kong-founded CBX Software. The firm has also sold HCP Packaging to The Carlyle Group for around USD 1bn and offloaded struggling lifestyle retailer Cath Kidston to a UK turnaround investor.

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