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Business trends

LGT Capital closes fourth Asia-focused PE fund at $1 billion

The entity attracted commitments from more than 50 institutions

  © Reuters

CEBU, Philippines -- Swiss alternative investment firm LGT Capital Partners announced that it has raised $1 billion for its fourth private equity fund that will invest in the Asia-Pacific region.

Crown Asia-Pacific Private Equity IV closed at the hard cap of $1 billion, well above the $586 million that the firm raised for its third fund in 2014, adding to the over $60 billion that LGT Capital manages.

The fund attracted commitments from more than 50 institutions, including pension funds, insurance firms and university endowments in Europe, the U.S., Canada, Australia and the Middle East, the firm said.

"We have seen increasing interest from institutional investors in the region. In parallel, the opportunity set of investments has also grown substantially," said Doug Coulter, Hong Kong-based partner at LGT Capital Partners.

Headquartered in Zurich, Switzerland, LGT Capital Partners has been active in the Asia-Pacific region since 1998. It focuses on private markets, liquid alternatives and multiasset class solutions.

The firm has offices in New York, Dublin, London, Paris, Vaduz, Dubai, Beijing, Hong Kong, Tokyo and Sydney.

Fund III had made 27 primary fund investments, 15 secondary fund transactions and 11 co-investments.

The final close of the fourth Asia-focused fund comes three months after the firm raised 1.35 billion euros ($1.5 billion) for Crown European Private Debt II. The fund, launched in late 2017, finances unitranche as well as subordinated debt transactions across Europe and targets investments in the range of 15 million euros to 150 million euros.

Fund IV will invest in companies that benefit from the consumption upgrade stories in both China and India, according to Ivan Vercourtere, the firm's managing partner.

The fund will also offer investors "balanced exposure" to some of small- and mid-market private equity firms across the entire region, he added.

"Our longstanding relationships with these managers provides us with the quality and quantity of deal flow required to remain highly selective in our private equity co-investments, as Asia becomes an increasingly attractive and important market for private equity," Vercourtere said.

According to a report released by global management consultancy Bain & Co, Asia now makes up a quarter of the global private equity market. The share of Asia private equity assets under management has risen close to $900 billion in 2018, which is 26% of its global AUM.

In terms of value, private equity firms in Asia clocked exits worth $142 billion but fundraising has slowed, with Asia-focused funds raising $75 billion in 2018, recording a rather big decline from the $156 billion raised in 2017.

In September, Morgan Stanley's Asia private equity unit raised $366 million for its fifth Asia PE fund, attracting commitments from 551 investors. The total offering amount for the fund has not been specified.

DealStreetAsia is a financial news site based in Singapore focused on corporate investment activity in Southeast Asia and India. Nikkei recently acquired a majority stake in the company.

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