Three of the five largest private equity funds are in Asia

Three of the five largest private equity funds are in Asia, as of the end of Q1 2017. Further, although over half of all private equity funds are focused on North America, Asia has overtaken Europe as the second most targeted region for private equity investment, according to recent data from Preqin.

Among the top five, China State-Owned Capital Venture Investment Fund, with a total target size of 200 billion yuan (US$29 billion) is the second largest private equity fund in the global market. UOB Venture Management’s Sino-Singapore (Chongqing) Connectivity Private Equity Fund, and China Ministry of Finance’s The China Internet Investment Fund also both made the top 5, according to recent data released by Preqin.

Data from Preqin

“Private equity fundraising has become even more competitive at the top end of the industry, with the launch of Softbank’s US$100 billion hybrid vehicle and increased participation from state-owned entities in Asia. These mega funds serve to drive headline figures, but away from this the private equity fundraising market remains incredibly competitive – Q1 2017 alone saw a net increase of 74 vehicles seeking investor commitments” comments Christopher Elvin, head of private equity products at Preqin.

In terms of private equity targeted investments, Asia overtook Europe. Asia now has 370 investment vehicles looking to commit US$157 billion in Asia, compared to 330 funds and US$104 billion in Europe.

Data from Preqin.

The total number of private equity funds grew in the first quarter of 2017, reaching 1,908 funds in the market, up from 1,834 at the start of the year. Private equity funds are now targeting an aggregate US$635 billion of investor capital, up from US$526 billion at the start of the year.

“Fund managers coming to market are targeting an investor base that is still very positive towards private equity. In a low interest rate environment, the asset class will continue to appeal to investors looking for high absolute returns and portfolio diversification. Moreover, because of the accelerated rate of distributions, investors are looking to increase their exposure to the asset class. It is therefore possible that the trend of capital concentration among the largest funds, which can accommodate substantial commitments and are capable of investing across a wide variety of sectors and geographies, will endure” says Elvin.

Date

27 Apr 2017

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