Just one week after filing paperwork for a fund targetting investments in China and Southeast Asia, Warburg Pincus has received commitments of up to $130 million to the new vehicle, according to official statements obtained by Mingtiandi.
The Warburg Pincus China-Southeast Asia II fund, which has a target of $4.25 billion, will receive this initial tranche of investment from an institutional investor in the US and a Taiwanese holding company.
New Jersey’s Division of Investment, which manages the US state’s $76.5 billion in pension funds, has made a commitment of up to $100 million to the new Warburg Pincus pooled equity vehicle, with the remaining $30 million coming from Taipei-based Fubon Life Insurance.
New Jersey Looking for Solid Returns
In a memorandum written on the same day that the Warburg Pincus fund was officially certified, the director of New Jersey’s Division of Investment, Corey Amom, cited the “robust performance and solid track record” of the US equity giant’s previous funds in support of the state’s investment decision.
“From 1994 through 2018, the firm has invested nearly $11.5 billion in 165 Asia‐based companies, generating a 1.9x gross multiple on invested capital and a 16.4 percent gross internal rate of return,” Amom wrote.
According to New Jersey’s May 24th memorandum, China-Southeast Asia II targets growth equity investments within the two geographies and is expected to invest 50/50 alongside the $14 billion Warburg Pincus Global Growth fund in the territory, as well as in tandem with the equity firm’s China and Southeast Asia energy and financial funds.
The aggregate market value of private equity investments held by New Jersey amounts to around 11 percent of the combined assets of the pension and annuity funds it manages.
Fubon Continues Fund Commitments
The second of the pair of commitments was announced on May 15th by Taipei-listed Fubon Financial Holding Company, which said it had committed $30 million to the fund on behalf of Fubon Life Insurance.
The financial holding company, which has a market capitalisation of TWD $517 billion ($16 billion), is investing the equivalent of what is expected to be 0.86 percent of the overall fund value.
Fubon Life Insurance has made a series of Asia Pacific-focused fund commitments this year, with this investment preceded by a $20 million contribution last week to a technology and health care focused vehicle managed by American venture capital firm New Enterprise Associates and $50 million committed to Blackstone Capital Partners VIII in March.
China-Southeast Asia II Gains Initial Commitment
The $130 million kickoff represents just over 3 percent of the target capitalisation for the US equity giant’s new fund.
As reported previously by Mingtiandi, Warburg Pincus’ China-Southeast Asia II will be the first of the NY-based firm’s funds to include a focus on Southeast Asia, in a sign that it intends to ramp up its presence in the region.
The company’s previous China pooled equity vehicle, Warburg Pincus China, closed on $2 billion in financing in 2016, providing fresh capital to build on what is now 25 years of investing in China on a range of projects including logistics group ESR and rental housing start-up Nova.
Warburg Pincus, which has now invested over $8 billion in mainland China alone, will continue to invest in early-stage and start-up companies, but will also target later-stage growth and buyout transactions.