RRJ Capital closes Fund III at $4.5b

The vehicle was substantially oversubscribed - with excess demand of around $1 billion - and a claw-back was required to accommodate all the investors, according to a source close to the PE firm. The total includes a contribution of at least $150 million from Richard and Charles Ong, co-CEOs of RRJ.

RRJ Capital Master Fund III launched in February and had a target in the region of $4 billion. It is the biggest vehicle ever raised by a GP headquartered in Asia, surpassing the $3.98 billion Baring Private Equity Asia accumulated for its sixth fund, which closed earlier this year. The largest pan-regional fund on record remains the $6 billion KKR Asian Fund II.

Disclosed commitments to the new RRJ fund include up to $75 million from the Teachers' Retirement System of the State of Illinois, $50 million from Texas County & District Retirement System, $150 million from New Jersey Division of Investment, $150 million from Oregon Public Employees Retirement Fund, $75 million from the Public Employees Retirement Association of New Mexico, and $50 million from Pennsylvania State Employees' Retirement System.

RRJ was set up by Richard Ong, formerly of Goldman Sachs and Hopu Investment Management, in 2011. His brother Charles, previously of Temasek Holdings, joined the following year. The firm closed its debut fund at $2.3 billion in 2011 and followed up with a second vehicle worth $3.6 billion in 2013. The Ong brothers' contributed $114 million to Fund I and $201 million to Fund II.

According to the New Jersey Division of Investment, the first fund had achieved a net multiple of 1.27x and a net IRR of 15.72%, with more than $1.4 billion in cash returned to LPs, as of December 2014. The second fund had returned $609 million to LPs, generating a 1.16x net multiple and a 25.56% net IRR.

With 30 investment professionals based in Hong Kong and Singapore, RRJ targets buyout, growth and special situations investments. It is primarily interested in financial services, natural resources and environmental services, consumer, food and agriculture, information technology, and outsourcing.

The firm's investments outside of Asia tend to have a strategic Asian angle, such as the subscription to $1 billion in convertible notes issued last November by Cheniere Energy. The US-based liquefied natural gas (LNG) producer, which RRJ first backed in 2012 alongside Temasek, is keen to export to Asia.

Also last year, RRJ joined a consortium that bought a minority stake in Sinopec's retail fuel unit and teamed up with Philippines-based Jollibee Foods Corporation to acquire the Dunkin' Donuts franchise for much of Greater China. Deals announced in 2015 include an investment in China Everbright Water and a second commitment - with co-investors - of $250 million to warehouse operator Shanghai Yupei Group.

RRJ's final close takes total Asia private equity fundraising past $42 billion so far this year, across full and partial closes. The $70.4 billion raised in 2014, the second-highest annual figure on record, seems unlikely to be bettered.

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• Topics
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