Capital International holds final close on $3bn

The firm’s sixth emerging markets fund will not focus on one particular region and will instead opt for a global approach.

Capital International has beaten a $2.5 billion target on its sixth emerging markets private equity fund to close on $3 billion, the firm announced in a statement. 

In a statement, the firm declared Fund VI the largest emerging markets vehicle to close in the last five years, using Emerging Markets Private Equity Association data. 

The firm received strong support from previous limited partners, with 90 percent of existing investors committing to the fund, according to the release. Around 60 institutional investors invested in Fund VI. 

“In the early days of emerging markets private equity, EM PE was considered more of a niche,” Managing partner Jim McGuigan told Private Equity International. “What I really think has changed … I think many investors have recognised that the emerging markets are delivering some of the best global private equity opportunities.”

Investor appetite was also piqued by Fund VI’s terms, which McGuigan characterised as LP friendly. Presentation materials made public by the San Diego County Employees’ Retirement Association indicate that the firm had a 1.5 percent management fee on aggregate commitments with a “step-down”  to 1 percent on the invested cost of unrealised investments for the balance of the fund life.

In addition to SDCERA, the Ohio Public Employees Retirement System, the Oregon Public Employees Retirement Fund and the Pennsylvania Public School Employees’ Retirement System have also committed to the fund. 

MVision Private Equity Advisers was Fund VI’s global placement agent. 

Capital International will make between 15 and 20 investments through the fund. While Fund VI is its largest vehicle to date (Fund V closed on $2.25 billion), the firm expects to complete a similar number of deals as previous funds, McGuigan said. The size and scale of target enterprises had grown since the firm’s last fundraise, he added.  

Beyond its overall emerging markets mandate, the firm is not targeting any specific market, opting instead to take a global opportunistic approach.

“We have no ‘must-do’ countries or ‘must-do’ deals,” McGuigan said. “We don’t feel compelled in any given fund to have any specific allocation.”

Capital International is an investment manager affiliate of The Capital Group Companies, which was founded in 1931. The Capital International private equity funds team has 24 investment professionals.