Actis, the emerging markets fund manager, is marketing a global private equity fund, which has a target of at least $1.25 billion, according to investors familiar with the group’s plans.
In addition, Actis is looking for another $1.25 billion in commitments to four separate regional funds dedicated to China, South Asia, Africa and Latin America, these sources say.
However, the firm risks alienating some investors with its “expectation” that investors in its regional funds will have to commit to its global fund, the first and largest it has ever raised. One existing Actis client said: “If I want to invest only in the China or India funds, I can’t just do that anymore. I have to invest in the global fund before I can get into the country funds.”
Another investor said her company could not invest in the funds because its mandates would not allow it to contribute to a global fund.
Actis’ largest fund to date is a $355 million African fund. Since the spinout from UK government investment agency CDC in 2004, Actis, led by senior partner Paul Fletcher, has raised an aggregate $1.6 billion from third party investors.
The firm has not specified how much capital it wants to raise for each of the four regional pools. However, investors expect the funds raised for India, China and Africa, where Actis already has local investments teams and a track record, to be larger than for Latin America, where the firm has not actively invested in the past.
In any investment, the umbrella fund and the relevant regional fund will co-invest on a 50 percent even split basis, according to an LP in existing Actis funds.
Another investor familiar with Actis said he would not be surprised if the firm were to raise up to $3 billion. “If they can attract $3 billion, they would definitely accept it,” he said. He said the new structure would likely appeal more to larger institutions such as pension funds and endowments in North America and Europe as well as sovereign funds in Asia and the Middle East.
Actis declined to comment.