CVC reaches $2b first close on fourth Asia fund - report

According to the Wall Street Journal, the European buyout firm expects to wrap up fundraising early next year, with $3.3 billion coming from investors and the rest from internal contributions.

LPs which are known to have contributed to the fund so far include Pennsylvania Public School Employees' Retirement System (PSERS) and Teachers' Retirement Systems of Louisiana (TRSL) which last week were revealed to have committed $175 million.

The new fund will aim to do deals in the $60-300 million range in Greater China, Japan, South Korea and Southeast Asia. The target return is 20-30% gross IRR and a gross multiple of 2-3x. The private equity firm's first Asia fund, a 2000 vintage vehicle that closed at $750 million, delivered a net IRR of 31.4% and a net multiple of 2.2x.

By contrast, Fund II - which received commitments of $1.9 billion in 2005 - did not fare so well. The failed investment in Australian media company Nine Entertainment resulted in a $1.4 billion loss for the firm earlier this year - the largest ever on the single private equity deal in Asia. Currently, the net IRR for Fund II stands at -9.6% and the net multiple at 0.6x.

On the other hand, Fund III - which closed at $4.2 billion in 2008 - performed better and has so far delivering a net IRR of 16.1% and a net multiple of 1.5x.

To date CVC has been increasingly active Southeast Asia . Earlier this year it exited a 46% stake in Indonesian retailer Matahari Department Store together with Multipolar, a vehicle owned by the Riady family's Lippo Group, raising $1.3 billion. The exit valued the entire company at close to $3.3 billion, or 27x 2013 forward EBITDA.

Meanwhile the firm has made new high-profile investments in the region, acquiring Philippine business process outsourcing (BPO) firm SPi Global Holdings for around $300 million in February -the country's largest ever buyout - and investing in Malaysian fast-food operators QSR Brands and KFC Holdings in $1.7 billion take private deal alongside Employees Provident Fund Board and Johor Corp. in January.

CVC is one of a number of global buyout firms currently raising an Asian fund. TPG is understood to have raised at least half of its fifth Asia buyout fund which was launched in April 2012 with a target of $4 billion. Carlyle, which launched its fourth Asia fund a month after TPG targeting $3.5 billion, reached a $1.5 billion first close in May this year. KKR meanwhile reached a $6 billion final close on its Asian fund earlier this year, representing the biggest private-equity fund ever to be raised in the region.

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