EMPEA: Emerging Asia reaches highest fundraising level since 2008

Funds with a final target size of $1bn or more accounted for 62% of capital raised in 2017.

Emerging Asia funds raised an aggregate $50 billion in 2017, the highest on record since 2008, according to data from the Emerging Markets Private Equity Association.

KKR Asian Fund III, which closed on $9.3 billion in June, the region’s largest fund in history, made up almost a fifth of the fundraising amount for emerging Asia.

According to EMPEA’s Year-End 2017 Global Private Capital Industry Statistics report, funds targeting at least $1 billion accounted for the majority (62 percent) of capital raised in 2017. These funds include CITIC Capital China Partners III, which collected $1.7 billion; Asia Alternatives Capital Partners V, which raised $1.8 billion; and Affinity Asia Pacific Fund V which closed on $6 billion.

In addition, sector-specific fundraising has steadily increased over the past eight years. Thirty-five sector-specific funds raised an aggregate $3.5 billion, compared with 32 funds that raised $3.2 billion in 2016, and 23 funds that collected $3 billion in 2015.

Venture capital funds in China and India also drove fundraising for emerging Asia. The most active VC fundraisers include Qiming Venture Partners, IDG Capital Partners and Matrix Partners China. A record 86 VC funds closed last year, including four that raised $500 million or more.

Investment activity also picked up in 2017 driven by deals larger than $300 million – $38 billion worth of deals were completed in the year, compared with $24 billion in 2016. Specifically, outsized growth and buyout transactions drove investment in emerging Asia’s three most mature markets: China, India and South Korea. The largest deals last year include Hillhouse Capital Management and CDH Investments’ $2.2 billion buyout of retailer Belle International and PAG’s $1.4 billion acquisition of Chinese industrial gas producer Yingde Gases.