Exclusive: Baring launches $3bn Asia fund

Jean Eric Salata’s firm expects to close its largest vehicle yet before year-end.

Baring Private Equity Asia is officially in the market with its latest private equity vehicle, having launched the fund in mid-May with a $3 billion target, Private Equity International has learned.

The fund, Baring’s sixth, expects a first close in September and a final close before the end of the year, likely in excess of its target, PEI’s source said. He added that the vehicle’s hard cap is yet to be decided, but it will be above the $3 billion cover, with the first close potentially expected to reach a number close to the full target. The firm is using UBS as a placement agent. 

While no LP commitments have been closed, the firm has a high level of interest, with “easily over half” of the fund expected to represent existing investors. Baring’s previous vehicle, a 2011 vintage, raised $2.46 billion, with a very high number of those LPs planning to re-up.

Baring’s fifth fund was around 60-65 percent deployed as of late March 2014, with the firm “so far delivering what they’ve promised” to investors, one source told PEI at the time.

While the $3 billion is more than the firm had originally planned to target, as Baring had anticipated to raise no more than $2.9 billion, this number is now fairly “conservative” given the interest, with LPs “not worried about them being able to deploy capital”.

Indeed the firm has been tied to a number of large deals lately, including leading the $3 billion buyout of Giant Interactive in March.

Baring, along with China’s Hony Capital, agreed to buy China-based online gaming company Giant Interactive with founder Yuzhu Shi, the deal using $850 million in debt financing, PEI reported earlier. Hony joined the consortium at the eleventh hour. The firm was also a named member of the Kohlberg Kravis Roberts-led $270 million acquisition of China's COFCO Meat, a subsidiary of agricultural state-owned enterprise COFCO Group, earlier this month. 

Baring typically invests around 30-40 percent of its capital in China-based businesses, but is active across the region. In India, Baring acquired Hexaware Technologies and Lafarge India last year, as well as sealing a $140 million buyout of Korean parcel delivery company Logen in August. 

This week, Baring also emerged as a potential investor in Pioneer Corporation in Japan, agreeing to tie up with Onkyo Corporation to buy the electronics company's home audio-visual business. Details of the transaction have not been disclosed, but Baring would own a majority interest in the investment. 

Baring, headed by chief executive and founding partner Jean-Eric Salata, has scaled up in recent years, investing and divesting rapidly across its Asia Pacific markets. The firm now has about $5 billion in assets under management.

Baring and UBS both declined to comment on fundraising.