(Bloomberg) -- EQT AB plans to raise $12.5 billion for its next Asia fund which, if successful, would be one of the biggest-ever pools of private equity in the region.
The actual fund size is dependent on the outcome of the fundraising process, EQT said in a statement on Wednesday, adding that the hard cap of the fund will be determined at a later date.
The fund will be managed by EQT Private Capital Asia, formed in 2022 when EQT acquired Baring Private Equity Asia in a $7.5 billion deal. Led by former Baring Chief Executive Officer Jean Eric Salata, its fundraising target is about 12% more than the $11.2 billion raised for a previous fund two years ago and its investment strategy “materially in line with the predecessor.”
The ambitious fundraising goal comes amid an otherwise gloomy private equity environment in Asia, with investors concerned by lingering economic issues, geopolitical tensions and sagging returns.
Private equity exits in the Asia-Pacific region fell 26% to $101 billion in 2023 compared with the previous five-year average and fundraising in the region dropped to the lowest level in a decade, according to Bain & Co’s 2024 industry report.
Still, Stockholm-based EQT estimates Asia’s private markets will grow at nearly double the rate of global private markets and that investors will increase their allocations in the region. CVC Capital Partners, Bain Capital and TPG Inc. raised a combined $19 billion for Asia funds since November, above targets.
EQT reported adjusted net income of €500 million in the first half of the year, up 11%. The firm’s shares have risen 11.6% this year.
The Asian Development Bank forecasts the region’s economy will grow at 4.9% this year and next, with much of developing Asia outside of China poised for expansion driven by strong consumer demand and easing inflation.
Headquartered in Hong Kong, EQT Private Capital Asia’s 160-member team focuses on the technology, services and health care sectors, investing in companies that are based in the region or derive significant growth from it, with equity investments ranging from $50 million to $1 billion.
KKR & Co. raised about $15 billion for an Asian fund in 2021.
--With assistance from Kati Pohjanpalo and Lin Cheng.
(Adds earnigns in 7th paragraph. An earlier version of story corrected to remove reference to record in headline, and largest ever in first paragraph.)
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