Baring Private Equity Asia has announced the closing of the Baring Asia Private Equity Fund IV with commitments of USD1.51bn making it the largest regional growth equity fund ever raised for Asia and bringing the firm's assets to USD2.5bn.

The fund, which had an original target of USD1bn, was heavily oversubscribed and had to raise its hard cap fundraising limit to accommodate high investor demand. It will deploy the same investment strategy as previous Baring Asia funds, targeting growing businesses with enterprise values between USD100m and USD500m that require capital for expansion, recapitalisation or for mergers and acquisitions.

Baring Asia IV will target companies in the alternative energy, media, financial services, consumer and industrial sectors with operations in the firm's primary investment markets of China, India, Japan, Singapore, Hong Kong and Taiwan, as well as the countries of South-East Asia.

'At a time when highly leveraged US and European buyouts are starting to show signs of stress, private equity funds focused on growth investing in Asia, a strategy which largely does not use financial leverage, are continuing to attract interest from around the world,' says Jean Eric Salata, the Hong Kong-based founding partner and chief executive of Baring Asia.

Gordon Shaw, a managing director based in Shanghai, says: 'We could have raised substantially more capital, but we decided to size the fund to enable us to target mid-sized growth equity deals, which in our opinion is where the best investment opportunities are today, particularly in China. We are seeing more high quality investment opportunities today than we have for years.'

Salata adds: 'Existing investors from our prior fund increased their commitment to Baring Asia IV by 154 per cent, and more than 40 new institutional investors also invested in the fund. We consider this particularly encouraging, given the current investment environment.' Around half the investors came from North America, a quarter from Asia, and a quarter from the Middle East and Europe.

Existing investors who have re-invested into Baring Asia IV include Pennsylvania Public School Employees Retirement System, Pantheon and Global Investment House. New investors include Ontario Municipal Employees Retirement System, Partners Group, University of Texas Endowment, the UK Universities Superannuation Scheme and Goldman Sachs Asset Management.

Baring Asia is one of the longest-established private equity investors in Asia, having begun investing in the region in 1997. Since its establishment, the firm has made investments with transaction values totalling USD2.8bn in more than 50 companies. The firm has an active portfolio of 28 companies with combined 2007 revenues of USD4.5bn, net earnings of USD488m and more than 50,000 employees. Revenues at its top 10 companies increased by 51 per cent in 2007.

The firm says its previous fund is the top-performing fund of its vintage in Asia, with a net internal rate of return to investors of 126 per cent as of March 31. Baring Asia has offices in Hong Kong, Singapore, Shanghai and Tokyo, and recently announced plans to open offices in Mumbai and Beijing.

       

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