Exclusive: NewQuest closes Fund II on $316m

The vehicle received significant support from existing investors, including LGT and HarbourVest.

Hong Kong-based NewQuest Capital Partners has closed its second direct secondaries private equity vehicle on $316 million, people with direct knowledge of the matter told Private Equity International. 

The fund was targeting between $300 million and its hard cap of $330 million, having made a $215 million first close in December last year.

NewQuest Asia Fund II is smaller than its $400 million predecessor, but has retained a number of its existing LPs, including LGT Capital Partners and HarbourVest Partners. PEI’s sources indicate the LP base is a mix of pension funds, family offices and sovereign wealth funds from all over the world, with no region outweighing another.  

The firm started fundraising for its second and final close in February, ultimately closing this morning on $316 million. There is a possibility one late investor will be brought in, but it is likely this will be the final closing for the fund.

NewQuest did not use a placement agent and declined to comment on fundraising details.

The firm is already actively investing and expects to have invested about 50 percent of the vehicle by the end of July across less than 10 companies.

For example, in January, the firm privatised NYSE-listed China Hydroelectric in a $190 million deal, paying a 57.4 percent premium on its shares, PEI reported earlier.

The firm has also been exiting from its debut fund, which is now fully invested, and has returned all capital drawn down from the fund back to LPs, according to a source. The 2011 vintage fund currently has a DPI number of above one, with recent exits including sales of iKang on the NASDAQ and Taiwan’s Primax.

While NewQuest declined to comment on the specifics of its funds, Darren Massara, managing partner at the firm told PEI, “The strategy is still focused on direct secondary opportunities. While the fund is pan-Asian, at this stage Fund II is likely to be invested in Greater China and India because that is where we see the greatest need to provide liquidity to private equity firms.”