Private equity giant TPG has gathered nearly half of its fundraising target in the first close of its fresh strategy dedicated for mid-cap deals in Asia’s developed markets this week.
The group’s first growth equity vehicle for the region, TPG Emerging Companies Asia fund, is expected to immediately be seeded with two investments, its CEO Jon Winkelried said in TPG’s quarterly earnings call with analysts on Tuesday. The fund’s total target remains undisclosed.
“The fund leverages our long-standing presence in the region and is consistent with our strong track record of building out adjacent strategies,” said Winkelried.
The move underscores strong demand for megafunds chasing regional deals in a strategy known for its resilience in market downturns. Unlike large buyout funds that rely heavily on IPOs for exits, mid-cap players can tap strategic and financial investors in the M&A market to generate distributions.
TPG joins Swedish investment giant EQT in rolling out a mid-cap strategy for the region. BPEA EQT Mid-Market Growth Fund closed at $1.6 billion in May 2024, more than double its initial $750 million target, with 80% of commitments coming from existing LPs in its large-cap Asia buyout fund.
A source familiar with the situation told DealStreetAsia that the fund’s geographic focus includes Australia; South Korea; and Southeast Asia, predominantly Singapore. TPG declined to comment on the information.
Australia, Japan, and South Korea continue to be preferred locations for private equity in Asia Pacific thanks to its developed economies and market depth. China, once a major part of the equation, has lost momentum in recent years due to macroeconomic uncertainty and geopolitical tensions.
Asia regional funds grabbed 40.2% of total capital raised in 2024, their biggest slice since 2019, per Preqin report. Investors continue to view Japan as the hottest developed market in the region, driven by compelling deals, ultra-low rates, and sliding yen, it said in the report.
TPG was recently reported to be a potential lead underwriter for Navis Capital Partners’s latest continuation fund that will contain Southeast Asian assets. It is understood to be reviewing the deal through its Asia-focused secondaries platform NewQuest, whose 2022-vintage fifth fund raised $673 million so far and has yet to announce the final close.
TPG also mentioned launching its first real estate credit strategy in South Korea with a strategic partner last year.
DealStreetAsia reported in January that TPG finalised a deal in Asian flower business Hasfarm Holdings, a Lombard Asia portfolio.
In another earnings call on Tuesday, Carlyle reported net performance revenues of $78 million in the last quarter of 2024, which were primarily driven by exit activity in its second US equity opportunities fund and its fourth Asia buyout fund.
