PAG eyes Southeast Asia, targets $1b in realizations - AVCJ Forum

"All of these six deals we have completed are in China, not by design, just because the deals met our investment criteria," Shan told the AVCJ Forum in Hong Kong. "We look at deals elsewhere but to date our investment has been concentrated in China and I hope that will change in the next year if not in the next quarter."

PAG reached a final close of $2.5 billion on its debut fund in September 2012 and deployed $900 million in the past 18 months despite what Shan described as "one of the most challenging times" he has seen during a 14-year career in Asian private equity.

Four of the six deals were control transactions and this has afforded PAG a degree of flexibility on exits, given the public markets - the typical exit route for minority investors - have been unreliable in terms of liquidity and timing. The expected $1 billion in realizations involve three companies, with 90% of the capital coming from trade sales, generating a money multiple of about 2x and an IRR of more than 35%.

Shan noted that the two-year holding period is shorter than the historical average of four years for his investments in Asia, explaining that this was largely a response to LPs' concerns about the market, particularly whether GPs are in a position to return capital.

"We have to increase the tempo because LPs are nervous," Shan said. "As a first-time fund you want to be able to return capital to LPs before going back to the market."

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• Topics
• Greater China
• Southeast Asia
• Exits
• Buyouts
• PAG
• Exit
• China
• Southeast Asia
• buyout
• Trade sale