Canada Pension Plan Investment Board's head of private equity for Asia has said it and other pension funds have contributed to the problem of too much dry powder in the region.
“It's funds like us that is part of the problem as well as all of the domestic Chinese private equity money,” Deborah Orida, managing director, said, at the FT Investment Management Summit Asia 2017 in Hong Kong on Thursday.
She added: “KKR just raised a $9 billion pan-Asian fund and there's a ton of Chinese private equity firms that have a lot of money and not a long track record of discipline.”
Funds in the region have raised more than $20 billion from the beginning of 2017 to date. KKR's $9.3 billion Asian Fund III is the largest, followed by Axiom Asia's fourth fund which collected $1.028 billion and CDH Investments' $800 million China mid-market fund, according to PEI data.
In April the C$317 billion ($235 billion; €209 billion) pension sealed its first deal in private education, co-investing with pan-Asian manager Baring Private Equity Asia to acquire Nord Anglia Education for $4.3 billion. In March it teamed up with Hong Kong-based private equity firm PAG to acquire Yingde Gases Group for more than $600 million. CPPIB has also been an active buyer in the secondaries market, having signed two deals representing more than C$200 million in the region since it launched operations there last August, as sister title Secondaries Investor reported.
Orida said there was “a lot of capital and it would be better if it was a little bit less.” She pointed out there are plenty of opportunities along the consumer theme and noted the importance of investors “picking their spots and going one level below the conventional wisdom.”