Asia Awards: Fundraising of the Year – PAG

At $2.5 billion, PAG Asia I is the largest regional buyout vehicle to achieve a final close since The Carlyle Group closed its third Asia fund at $2.55 billion in 2010. It is also the first private equity fund that PAG has ever raised.

"The greatest challenge is that we are a first-time fund and many LPs have a rule not to invest in such vehicles," David Kim, partner at PAG Capital, tells AVCJ. "We think that LPs have become much more discerning and selective than prior to the global financial crisis."

Nevertheless, the maiden vehicle - which launched in November 2010 - reached a first close of $1.7 billion in just seven months. At that time, PAG had already secured sufficient commitments for the entire vehicle, but didn't officially complete fundraising until June of this year because certain LPs were still finishing off due diligence and documentation.

Large institutional investors including sovereign wealth funds, pension funds and financial institutions make up more than 90% of the LP base. Market sources tell AVCJ that there According to market sources, there are only about 20 LPs in total.

While Weijian Shan, CEO of PAG, is well-known in private equity circles from his time at Newbridge Capital and TPG Capital, David Kim - who spent more than 14 years at Lehman Brothers - argues that the partners' track records and experiences only help a firm complete the preliminary qualifying round in a fundraising race.

"LPs are far more focused on your organization, your team, your institutionalized practices, and what differentiates you from your competitors," he explains. "We think one major advantage of our fund is that it's the best of both worlds: we combine the best practices typically found in global PE firms and the better local connectivity of country-specific funds."

While PAG Asia I has a region-wide mandate, most of the capital is likely to be deployed in China. Consumer retail, financial institutions, industrials and transportation, energy and healthcare are the areas of focus. The fund has already backed a management buyout of US-listed Funtalk China Holdings, completed the buyout of Bicon Pharmaceuticals Holdings and participated as a cornerstone investment in Haitong Securities' Hong Kong IPO.

"We focus on buyouts although we may also make strategic and structured investments without control," Kim elaborates. "Typically we invest no less than $100 million per deal, but we are able to underwrite much larger equity checks because of our LPs' co-investment capacity."

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• Topics
• Fundraising
• Greater China
• Fundraising
• Asia
• China
• PAG
• AVCJ Awards