Asia fundraising – more than just a renminbi story

Asian fundraising league tables, however, continue to look respectable thanks to the rise of renminbi-denominated funds, which have pumped billions of fresh capital into China's already competitive private equity industry. From more humble beginnings, renminbi vehicles have begun to dominate Asian fundraising.

The renminbi's reign over the region's private equity league tables will likely come under threat in 2012 as Asian returns to the top of many global LPs' agendas. Taking advantage of this sentiment, the biggest players, including the Asian operations of KKR, Bain Capital and TPG, are now returning to the market to raise new US dollar investment vehicles.

Indeed, the past year has proven successful for many Asian firms raising US dollar funds. Jean Eric Salata and his partners at Baring Private Equity Asia first lit up the scoreboard with a $2.46 billion final close on the firm's fifth fund. The fund, almost a $1 billion larger than its predecessor, closed in less than five months.

Indonesia is also getting plenty of attention as Asia's most promising "new" market, so there was little surprise when TPG-affiliated Northstar Pacific managed to close its third fund at $820 million, having originally targeted $500 million. It is by some distance the largest Indonesia-focused vehicle ever created.

Elsewhere in Asia, GPs deserve credit for successful fundraises in more challenging conditions. A good example would be former Morgan Stanley Private Equity Asia CIO, Scott Hahn, whose Hahn & Co. outfit closed its debut fund at $750 million for his debut fund - a testament to Hahn's stellar track record in the often difficult South Korean market.

With all these new funds coming into the market, this begs the question whether there is too much money chasing too few deals. Our research figures show that capital is being put to work by Asian private equity professionals.

Certainly, this year we have seen a number of deals in Asia's major buyout markets, Australia and Japan, involving not only local firms but also regional operators like Bain Capital, which helped move the needle with deals such as MYOB and Skylark. Regional firms have also closed big ticket transactions, notably Affinity Equity Partners with its acquisitions of NZ Poultry and Primo Smallgoods, and Archer Capital, which spent about $1 billion on a string of deals in mid-2011.

An interesting sub-trend is the rise of secondary buyouts, which has gone from faux pas to de rigueur in recent years - a sign of the Asian PE industry's growing maturity. We have even seen the spawning new funds, such as NewQuest Capital Partners, that focus exclusively on direct secondaries, helping GPs nearing the end of their fund life to realize investments.

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• Topics
• Fundraising
• LPs
• Fundraising
• China
• Indonesia
• Asia
• KKR
• Bain Capital Asia
• TPG Capital