Warburg Pincus has reached a final close of $4.25 billion on its China and Southeast Asia private equity fund, the US alternative investment giant’s first pooled investment vehicle to include a dedicated focus on the ASEAN nations.
The fund raising milestone comes just five months after Warburg Pincus began gathering commitments for the strategy with an initial target of $3.5 billion, according to a statement by the company.
“The strong demand for Warburg Pincus China-Southeast Asia II reflects our established track record, our talented investment team, and the opportunities our Limited Partners see for growth investing in China and Southeast Asia,” said Charles Kaye and Joseph Landy, Warburg Pincus’ co-chief executive officers.
The new fund has now brought in more than double the $2 billion that the company raised for its first pooled Asian vehicle, Warburg Pincus China, in 2016.
Building One of Asia’s Biggest PE Warchests
The pooled private equity vehicle is a companion fund to Warburg Pincus’ Global Growth, a $14.8 billion growth-focused private equity fund that closed last year. The New York-based firm indicates that the pair of funds will jointly invest in real estate, healthcare, financial services, and telecommunications opportunities in China and Southeast Asia.
Warburg Pincus said in its announcement that the two funds, with combined cash of $19.05 billion, give the investment manager one of the largest dedicated pools of capital targetting China and Southeast Asia in the private equity industry.
Investors to the fund include public and private pension funds, sovereign wealth funds, insurance companies, endowments, foundations, fund of funds, family offices and high-net-worth individuals.
New Jersey’s Division of Investment, which manages the US state’s $76.5 billion in pension funds, has committed $100 million, while Taipei-listed Fubon Financial Holding Company put forward $30 million on behalf of its Fubon Life Insurance division, as reported previously by Mingtiandi.
Partnering Entrepreneurs to Grow its Southeast Asia Footprint
The US giant’s success in fund raising, which saw the company exceed its investment target by $750 million in less than half of a year, may be due in part to its track record in real estate ventures across the region.
“Over our 25-year history in China, we have partnered with some of the most successful entrepreneurs and companies in the country and we have seen growing opportunities in recent years driven by those relationships and our success,” said Julian Cheng, managing director and co-head of China.
Less than two weeks ago, Warburg Pincus-backed ESR offset its postponed $1.4 billion initial public offering when its ESR-REIT announced a S$225 million ($164 million) agreement to acquire a stake in a warehouse in Singapore, S$45.7 million in improvements for a pair of its existing properties, and a program to raise S$150 million through a pair of new equity sales.
The US firm made its first foray into Asia rental accommodation outside of mainland China last year, investing an initial $181 million of a total $413.5 million in a partnership with Hong Kong co-living provider Weave Co-living.
25 Years of Investing in China and Counting
China-Southeast Asia II will allow the US private equity firm, whose first investment on the mainland was in 1994, to pursue an interest in China that has already seen it invest in real estate brokerage Lianjia and rental apartment providers Mofang and Nova.
In the last week of 2018, the company’s deal-makers wrapped up an investment of up to $300 million in a new joint venture with Shanghai-based urban renewal operator Creater to acquire and redevelop real estate projects in China’s first-tier cities.
Warburg Pincus’ previous China fund, Warburg Pincus China, closed on $2 billion in financing in 2016.