TPG reaches $3.4b first close on Asia fund
TPG has reached a first close of USD 3.4bn on its eighth flagship Asia fund, which launched earlier this year with a target of USD 6bn.
The first close was disclosed in the private equity firm’s third-quarter financial results. It accounted for much of the USD 8.2bn raised globally during the three-month period. TPG’s ninth global flagship fund, second healthcare fund, and third impact fund are also in the market with targets of USD 15bn, USD 3.5bn, and USD 3bn, respectively.
The firm closed its seventh pan-Asian fund on USD 4.6bn in early 2019 after an approximately two-year process. This included a GP-led secondary transaction that saw secondary investors make a primary commitment to the new vehicle and take out existing positions in Funds V and VI through a tender offer. Around USD 1bn was committed in total.
Fund VII had generated a net multiple of 1.5x and a net IRR of 18% as of September 2022. Fund VI (2012 vintage, USD 3.3bn corpus) was on 1.8x and 13% and Fund V (2007, USD 3.8bn) was on 1.4x and 6%. Fund V originally closed on USD 4.25bn – making it the largest Asia fund ever raised by that point – but some LPs were released from their commitments in the wake of the global financial crisis.
TPG’s recent large-cap investments have focused on Australia, India, and Southeast Asia. It recently acquired a majority stake in Australia-based prescription medicines business iNova Pharmaceuticals at a valuation of around AUD 2bn (USD 1.3bn), facilitating exits for Pacific Equity Partners and The Carlyle Group.
This followed a USD 360m commitment – including primary and secondary components – to India and US-based data analytics provider Fractal and participation in a USD 350m funding round for The CrownX, a Vietnam-based consumer brands and retail business.
Other activities this year include securing USD 760m in new equity and debt funding for clinical trials specialist Novotech at a valuation of USD 3bn and selling a 45% stake in Australian pet care business Greencross to AustralianSuper and Healthcare of Ontario Pension Plan at a valuation of AUD 3.5bn.
TPG, which has USD 135.1bn in assets under management globally, is primarily active in Asia through its buyout, growth, and impact strategies. TPG Rise Climate, the firm’s first dedicated climate vehicle, closed earlier this year on USD 7.3bn.
The fundraising environment for Asia-focused managers – especially those with significant exposure to China – is challenging, with USD 104.1bn raised so far this year. The annual average for the prior five years is USD 142bn.
Two global managers have achieved final closes on pan-regional funds: The Blackstone Group secured USD 6.4bn for its second Asian offering and BPEA EQT – formerly Baring Private Equity Asia – raised USD 11.2bn for its eighth vehicle. The likes of PAG, The Carlyle Group, CVC Capital Partners, and Bain Capital are in the market targeting USD 9bn, USD 8.5bn, USD 6bn, and USD 5bn.
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