MSPEA closes $1.7bn Asia Fund IV

Morgan Stanley’s Asia private equity arm's latest fund is double the size of its predecessor

Morgan Stanley Private Equity Asia has closed its latest fund on $1.7 billion attracting institutional investors globally, according to a statement by the firm.

The vehicle is MSPEA’s fourth private equity fund and double the size of the firm’s third vehicle in dollar terms, attracting capital from US state pension plans, sovereign wealth funds, financial institutions, fund of funds, endowments, and high net-worth individuals, as well as Morgan Stanley and the investment team.

MSPEA targets strong businesses in the Asia Pacific region and has already completed two investments, as well as agreeing a further five.

“We are very pleased with the strong support we have received for our latest fund,” said Chin Chou, chief executive officer of MSPEA. “For Fund IV, we will continue our value-oriented investment strategy, and we believe the current environment represents an excellent opportunity to buy and invest in Asian businesses at very attractive prices.”

Homer Sun, chief investment officer of MSPEA, added that China will be a key area of focus for the fund.

“We continue to believe that China represents one of the world’s most attractive investment destinations. In addition, we have been active in Korea, particularly in the buyout space, and as such we expect Fund IV to aggressively pursue opportunities in that market.”

Morgan Stanley’s Asia private equity team has invested about $2.5 billion in Asia, primarily in highly structured minority investments and control buyouts in profitable, growth-oriented companies, with a significant majority of the investments sourced on a proprietary basis, according to the firm.

The group has made over 50 investments in businesses throughout Asia, including most recently, Sihuan Pharmaceutical, Buchang Pharmaceutical, Feihe International and Tianhe Chemicals, in China; Ssangyong C&B Monalisa and Nolboo, in South Korea; Janalakshmi Financial Services in India; and previously CTCI, China Trust and E.Sun, in Taiwan.