Asian PE raises $6.6bn in Q1, led by RRJ Capital

Asian private equity funds that held a final close in the first quarter raised a total of $6.6 billion, with more than half coming from the $3.5 billion garnered by RRJ Capital’s second vehicle.

The region contributed a small slice of the $67 billion taken in by the 129 PE funds globally that closed in Q1, according to a Preqin report. North American managers raised $36.4 billion via 63 funds, with 30 Europe funds accounting for $22 billion.

The $6.6 billion was raised by 28 Asia funds that closed in Q1. It represents about half of the $11.2 billion raised by 19 vehicles focused on the region during the same quarter last year.

It counters the capital-raising trends of the US, which in the first quarter of last year saw $27.3 billion brought in by 67 funds, and Europe, where 23 vehicles took in $15.1 billion.  

One reason for Asia’s decline in fundraising can be attributed to a movement among managers of raising smaller funds in frontier markets in Asean, says Mitul Patel, manager of Asia research at Preqin.

They include vehicles focusing on markets such as Indonesia, Cambodia, Myanmar and Laos. “Managers may raise a smaller fund first to gain an idea of investor interest in these regions,” Patel tells AsianInvestor.

“Asia fundraising is still heavily weighted towards smaller-sized growth and venture vehicles,” which offers opportunistic exposure to new and growing businesses and industries in the region, he notes.  

Of the 28 Asia funds that closed in Q1, six were growth capital funds and six others were distressed vehicles.  

The buyout fund category represents more than half of the total capital raised during the quarter, but it is skewed by the reported close of RRJ Capital Master Fund II at $3.5 billion last month.

While Hong Kong-based RRJ Capital – run by brothers Richard and Charles Ong – has not yet made a formal announcement, it is said to have held a final close on Fund II despite falling short of its initial $5 billion target.

However, it took only seven months for RRJ to raise the sum, which exceeds Bain Capital’s $2.3 billion Asia Fund II, which closed in mid-2012.

Richard Ong is a Goldman Sachs veteran who previously headed China-focused PE firm Hopu Investment Management, while sibling Charles hails for Singapore sovereign fund Temasek. 

Their second fund was the fourth-largest PE vehicle to have closed in Q1 on a global basis. Europe’s Cinven and EnCap Investments of the US were tied for the biggest fundraisers during the quarter, each having closed a vehicle at $5 billion.