Baring PE Asia hits $4.5bn first close on Fund VII – exclusive

Baring Private Equity Asia has collected more than 80 percent of the target of its seventh flagship fund, Private Equity International has learned.

The pan-Asian manager held the first close on $4.5 billion for Baring Private Equity Asia Fund VII on 10 July, according to two sources familiar with the matter. The firm garnered commitments from 60 investors including sovereign wealth funds and North American pension funds including Teacher Retirement System of Texas and Canada Pension Plan Investment Board, the sources said. Rhode Island State Treasury Public Pension Fund made a $50 million commitment, according to PEI data.

The fund’s target is $5.5 billion, according to the sources. Its hard-cap is unclear.

The Hong Kong-headquartered firm began fundraising for Baring Private Equity Asia Fund VII in February 2018 and expects a final close on target by year-end. Fund VII will have hurdle rate of 8 percent.

The firm’s latest offering is significantly larger than its predecessor, the 2014-vintage $3.99 billion Fund VI. Fund VI has delivered a net internal rate of return of 18 percent to date, according to a source familiar with the fund’s performance. Baring PE is targeting a 25 percent gross IRR for Fund VII.

Fund VII is set to be the second-largest pan-Asian fund raised this year. In June Carlyle Group raised $6.55 billion for its fifth Asia buyout fund, while Blackstone held a $2.3 billion final close for its first Asia-dedicated buyout fund in the same month.

The firm also held a final close on BPEA Real Estate Fund II in August on $1 billion, bringing the total capital raised by Baring PE this year to $5.5 billion.

Baring PE declined to comment.