TPG to reach first-close of new Asia fund at over $3 billion – sources

By Kane Wu and Anshuman Daga

HONG KONG/SINGAPORE (Reuters) -U.S. private equity firm TPG Inc is set to reach first-close of its new Asia-focused fund at more than $3 billion, two people with direct knowledge of the matter told Reuters.

TPG kicked off fundraising of its eighth private equity fund for the region in January, targeting $6 billion, the company said during its March earnings call. If successful, the fund will be its largest Asia fund to date.

The Fort Worth, Texas-based firm is expected to announce the first-close in November, said one of the two sources and a third person with knowledge of the matter.

Private equity funds typically begin investing after their first-close, when they have received an initial round of commitments from investors.

TPG declined to comment. The sources declined to be identified as they were not authorised to speak to the media.

TPG is among a slew of global and regional private equity firms that are raising new funds for the region this year.

Hong Kong-based Baring Private Equity Asia last week announced it had closed its eighth, and largest, pan-Asia fund at $11.2 billion.

TPG’s U.S rival Carlyle Group (NASDAQ:) is aiming to raise $8.5 billion in a new Asia fund, according to separate people familiar with the situation. Carlyle declined to comment.

The first-close of the TPG fund will come against the backdrop of a challenging global macroeconomic and geopolitical environment that has triggered a sharp sell-off in markets and a rise in financing costs.

Funds in Asia are sitting on $521 billion worth of unspent cash, or ‘dry powder’, according to data provider Preqin.

In the region, the total value of deals backed by private equity in 2022 up to Sept. 15 was $121.5 billion, plunging 41% from a year earlier, according to Refinitiv data.

The slowdown is more significant in China, with total deal value down 72% on 2021, as coronavirus-control measures in many parts of the country hurt the economy and prevented potential transactions from going ahead.

TPG’s new Asia fund will have about 20% of its capital allocated to China investments, as did its last two funds, according to the third source.

TPG declined to comment on allocations to specific markets.

Since its inception in 1994, TPG Asia has invested more than $13 billion across its core regions and sectors, according to its website. It last raised a $4.6 billion Asia fund in February 2019.

Its Asia portfolio includes Chinese financial services firm Du Xiaoman, Australian entertainment business Funlab, and Hong Kong telecom operator HKBN, the website showed.

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