The new fund will be one fifth bigger than its last one, TPG Asia VI, which raised $3.3 billion in 2014, and reflects growing investment opportunities in the region.
Global buyout firm Capital Management is seeking to raise more than $4 billion for a new Asia-focused fund, in what would be its biggest for the region, people familiar with the plans told Reuters.
The new fund will be one fifth bigger than its last one, TPG Asia VI, which raised $3.3 billion in 2014, and reflects growing investment opportunities in the region. It would, however, still trail the regional record set by KKR & Co’s Asia Fund II which raised $6 billion in 2013.
Total capital available for investment could reach about $6 billion when co-investments from limited partners – the pension funds and institutional investors who will invest in the TPG fund – are included, one of the people said.
TPG declined to comment. Sources declined to be identified as the fund raising plans were confidential.
The new fund would add to the $9.4 billion already raised by Asia-focused buyout funds this year, according to data provider Preqin. Some of the largest capital raisings in the past year include a $3.6 billion fund by Hong Kong-based private equity firm PAG, $2.7 billion by Hony Capital and $3 billion from Bain Capital.
Co-investments allow limited partners to invest in target companies through the fund itself and directly without having to pay management and performance fees, which can translate into millions of dollars of savings.
TPG invested $577 million from its TPG Asia VI fund in 2015, bringing the total invested capital to $1.4 billion, according to an annual letter to its limited partners seen by Reuters in December. Limited partners in the fund co-invested an additional $338 million last year.
TPG this year invested $150 million in Indian micro finance lender Janalakshmi Financial Services. It has also completed the sale of packaging company HCP to Baring Private Equity Asia in a transaction that sources have said was valued at $775 million.
Its other investments in the region include stakes in China International Capital Corp (CICC), the country’s largest domestic investment bank, Bank Tabungan Pensiunan Nasional (BTPN) in Indonesia and Apollo Towers, which operates mobile phone towers in Myanmar.
TPG has also made five senior hires in Asia this year, including top executives in Australia and South Korea with Joel Thickins and Sanghoon Lee, and partners in Hong Kong and Beijing.