Hong Kong-based NewQuest Capital Partners, the former Asian private equity arm at Bank of America Merrill Lynch, plans to deploy between $100 million to $200 million over the next 12 to 18 months to acquire portfolios of direct private equity positions in Asia from investors seeking liquidity solutions.
“Our pipeline is robust,” NewQuest managing partner Darren Massara told PE Asia, “with about 13 portfolio deals and about 35 single asset situations under assessment right now.” He added that private equity investors are “highly motivated” to find liquidity.
“Given where the markets in Asia are today – with trade sale markets being fairly underdeveloped and IPO markets continuing to be choppy – exits remain hard to come by. And because the bulk of capital which has been deployed in Asia has been through smaller, minority growth capital-type transactions, there is quite a backlog of deals waiting to be exited,” he continued.
In terms of types of assets, Massara said one could argue that certain sectors in India and Greater China, such as technology, media and telecommunications (TMT), clean energy, healthcare and education, may have been “over-invested”.
“We anticipate we should see more deal flow in those particular sectors in the coming years,” he said.
In addition, to complete the build-out of the firm, NewQuest has appointed Lung-Chi Lee as general counsel. He will help the firm further develop its platform in the region with a focus on new deals, investment structuring, divestments, corporate governance and compliance, according to a statement.
“The opportunity in Asia for a direct secondary strategy is significant and has been largely untapped to date,” Lee said in the statement.
He was most recently general counsel for private equity and head of legal for M&A with GE Capital for the Asia Pacific region based in Hong Kong. Previously, Lee practiced law in Shanghai, Hong Kong, and San Francisco with Paul, Hastings, Janofsky & Walker LLP and Perkins Coie LLP.
NewQuest was established in 2011 with $400 million of backing from Paul Capital, HarbourVest Partners, Axiom Asia and LGT Capital Partners.