Affinity hauls in $6bn for fifth Asia buyout fund – updated

The Hong Kong-based manager had a 95% re-up rate and garnered commitments from new LPs including Japan Post Bank.

Pan-Asia buyout firm Affinity Equity Partners has amassed $6 billion for its latest vehicle after less than four months in market, Private Equity International has learned.

The firm launched Affinity Asia Pacific Fund V on 23 August 2017 and held a first and final close in mid-December, raising $1 billion more than its original $5 billion target, a source familiar with the fundraising told PEI.

Fund V, delivering the fastest and largest fundraise in the Hong Kong-based manager’s history, had nearly $9 billion in demand, a second source told PEI. The first source added Fund V was substantially oversubscribed and turned away a significant number of limited partners, while some investors had to be cut back on allocations.

Seventy percent of capital raised for the vehicle came from Affinity’s existing LPs, while the remaining 30 percent was contributed by new LPs including Japan Post Bank and APG.

North American LPs made up 40 percent of Fund V’s investor base, followed by Asia-Pacific LPs at 25 percent, European investors at 20 percent and Middle Eastern investors at 15 percent.

The fund received strong backing from a diverse group of investors: close to 50 percent of capital commitments came from pension funds, 25 percent from sovereign wealth funds, 15 percent from financial and insurance companies, 6 percent from funds of funds, and 5 percent from endowments, foundations, family offices and high-net-worth investors.

The New Mexico State Investment Council committed $100 million, according to PEI data. Other notable and repeat investors include GIC, New York State Common Retirement Fund, Maine Public Employees Retirement System, Washington State Investment Board, Michigan Department of Treasury, Kuwait Investment Authority, Abu Dhabi Investment Authority, Partners Group and Adams Street Partners, the first source said.

The vehicle is significantly larger than its predecessor, which collected $3.8 billion in 2013 and is 70 percent invested. Fund IV is showing a 1.84x net multiple and a 31 percent net IRR, according to LP documents.

Fund V is expected to target control deals in the region, a strategy that has remained unchanged in the firm’s 18-year history.

The firm’s latest vehicle comes amid a buoyant fundraising market for pan-Asia players. KKR raised $9.3 billion in June last year, the region’s largest ever fund. Meanwhile global firms such as Blackstone, Permira, TPG, Morgan Stanley Private Equity and Carlyle are on the fundraising trail and their targets amount to more than $15 billion.

Affinity declined to comment.

This report has been amended to show that Affinity raised a total of $6 billion in capital commitments for Fund V.