CVC readies $1bn Asia fund

CVC Capital Partners has announced plans for a follow-up vehicle to the $750m Asia fund launched in 2000 which is now 80 percent invested.

CVC Asia Pacific, the Asian private equity business of CVC Capital Partners, has said that it plans to launch a $1 billion (€800 million) buyout fund. It will be the successor to the firm’s debut Asia fund, which closed on $750 million in 2000.

According to the Financial Times, CVC’s chairman Michael Smith said the fund would focus on buyout opportunities in South Korea, China, Singapore, Japan and Australia.

 

CVC has made a total of thirteen investments across the region since 1999, when the firm backed a $210 million buyout of WiniaMando Inc, a manufacturer of climate control systems for commercial vehicles based in Korea.

 

Last year CVC joined forces with JP Morgan Partners Asia to acquire Singapore Telecommunications Yellow Pages directories business for $127 million in cash. In December 2003, the firm acquired Pacific Brands, a distributor of clothing, sporting goods and household products in Australia and New Zealand, for $403 million. This business is currently being prepared for an IPO later this year.

 

“We have demonstrated that you can do buyouts in these economies,” Michael Smith told the Financial Times. “There is a growing acceptance of private equity.”

 

A recent report published by the Asian Venture Capital Journal revealed that a total of $17.9 billion (€14.24 billion) was invested by private equity firms in Asia last year. This compares with $10.45 billion invested in 2002, an increase of 91 percent. Japan was the leading market for investors with approximately $7.3 billion. South Korea placed second with $3.3 billion invested.

 

The report also highlighted a pick-up in fundraising activity in 2003, which it said was likely to gather pace in 2004. Asian private equity firms raised a total of $3.32 billion in 2003, up eleven percent from the previous year’s total of $2.99 billion.

 

2004 looks set to be big year for fundraising, with Affinity Capital, formerly UBS Capital (Asia Pacific), MKS (the former Schroders Japan business), Asiavest Partners and GS Private Equity all planning fundraising programmes for this year.

 

BPEP Asia, the Asian unit of Baring Private Equity Partners, is also likely to launch a fund later this year, the follow-up to the Baring Asia Private Equity Fund II LP, which held a final close at $257 million in 2002.