Exclusive: Baring will hit $3.85bn hard cap

The firm has made a first close on $3.2bn and expects to close oversubscribed before year-end

Baring Private Equity Asia has raised soft commitments of as much as $3.85 billion towards its sixth private equity vehicle, a source close to the matter told Private Equity International.  

It emerged last week that the firm had made a first close on $3.21 billion of commitments, which PEI’s source confirmed, but he added it is “just a matter of time” until it closes on its $3.85 billion hard cap and expects to be “quite significantly oversubscribed” as a number of LPs were unable to even fulfil their desired allocations to the fund due to high demand.

Currently, the firm already has initial agreements from LPs for funds up to the hard cap amount, but they haven’t crossed the line in terms of signing legal documentation.

A spokesman for Baring declined to comment. 

LPs that have committed a substantial amount to the new fund include the Canada Pension Plan Investment Board (CPPIB) and Illinois Teachers' Retirement System, with most of the capital coming from North America, the source said.

So far, funds raised are made up of 25 percent new LPs, with the rest coming from existing investors. CPPIB has also been a large supporter of Baring in the past.

The fund is offering LPs a 1.8 percent management fee, although due to its widespread office base there has been little movement on the typical 2:20 fund structure.

Baring launched its latest private equity offering in June this year with a $3 billion target – well above the $2.46 billion raised by its predecessor vehicle – and enlisted UBS to act as placement agent on the fund. 

The $3 billion was more than the firm had originally planned to target, as the anticipated $2.9 billion was later considered fairly “conservative” given the interest, and LPs were “not worried about them being able to deploy capital”, one industry source told PEI earlier.

Meanwhile, Baring has continued to be highly active across Asia Pacific, as well as globally in businesses that have potential to expand into Asia.

In August, Baring and Canadian private equity firm Altas Partners invested about $750 million in St. George’s University, Grenada, to help expand the school’s reach across Asia. Similarly, the firm invested in UK retailer Cath Kidston earlier this year to develop its presence in Asian markets.