Asia PE fundraising slows to $6.6b in first quarter

The quarterly total - which may be revised upwards as information regarding other fundraising activity emerges - is the lowest since the first three months of 2009. Only about 30 funds achieved an incremental or final close, compared to an average of 80 per quarter since 2012.

Australia and China were the only two markets to register a quarter-on-quarter increase in funds raised. In Australia, Quadrant Private Equity, arguably one of only a handful of domestic GPs capable of raising $750 million or more, closed its seventh fund - and fourth as a fully independent entity - at A$850 million ($750 million).

Meanwhile, in China, the weak fundraising environment for renminbi-denominated vehicles continued, with nearly $0.90 in every $1 committed going to a US dollar fund. Of that $0.90, roughly half ended up in the second and final close of CDH Investments' fifth fund.

The $2.55 billion vehicle, which reached a first close of $1 billion in early 2012, is the largest China fund ever raised by an independent manager.

The China fundraising numbers were also boosted by a rise in venture capital activity. Only eight China VC funds reached a close in the first three months of 2014, well below the average of 15 for the last two years, but they raised $1.3 billion between them, the largest quarterly total in about two years.

Qiming Venture Partners and DCM led the way. The former took just a few months to accumulate $500 million for its fourth US dollar fund. The latter closed DCM VII at $330 million, above target but smaller than its predecessors in anticipation of reduced activity in the US, although China will play a more significant role.

Private equity investment in Asia reached $23.8 billion in the first quarter, the highest level since late 2010 when the Chinese pre-IPO machine was still purring and growth deals from that market made up the bulk of deal flow.

Buyouts were up 100% quarter-on-quarter, supported by The Carlyle Group's acquisition of fire safety and security systems provider Tyco International's local unit for $1.93 billion. It is the largest PE buyout in Korea for seven years.

Other significant deals included EQT Partners' purchase of Australia-based I-Med Holdings and Temasek Holdings' $2 billion bid to complete a full acquisition of Olam International.

Exits were boosted by KKR and Affinity Equity Partners' sale of South Korea's Oriental Brewery to Anheuser-Busch InBev for $5.8 billion - the largest trade sale ever seen in Asia. This deal helped Asia exits reach $12.9 billion in the first quarter, the highest level in a year, with more than half coming from trade sales.

Proceeds from private equity-backed IPOs jumped from $3.5 billion in the third quarter of 2013 to $9.9 billion in the final quarter. Activity remained robust in the first three months of 2014 as 53 offerings generated proceeds of $9.6 billion.

For further analysis on private equity activity in Asia in the first quarter of 2014, please click here.

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• Topics
• Fundraising
• Investments
• Exits
• Fundraising
• Growth capital
• buyout
• Asia
• Exit
• Trade sale
• IPO