Private Equity News & Analysis

PAG smashes target with $6bn raise

The buyout manager held a one-and-done on its third Asia fund, which originally targeted $4.5bn.

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Hong Kong-headquartered PAG has exceeded its $4.5 billion original target for its third Asia fund, securing $6 billion from investors.

PAG Asia Fund III was oversubscribed and held a first a final close on Friday after six months in market, the firm said.

Almost all existing investors re-upped and demand far-exceeded the $6 billion hard-cap for Fund III, Weijian Shan, chairman and chief executive of PAG, told Private Equity International.

Investors in PAG’s previous funds include Canada Pension Plan Investment Board, California State Teachers’ Retirement System and Maryland State Retirement Pension System. Washington State Investment Board committed $350 million to the fund, according to PEI data.

Fund III is about 60 percent larger than its predecessor, which closed on $3.66 billion in 2015 and is fully invested, according to the firm. PAG Asia Fund II generated a 38.88 percent net internal rate of return and a 1.4x investment multiple, according to WSIB data as of 31 March.

The firm’s debut fund, the 2011-vintage $2.5 billion PAG Asia I, delivered a 22.4 percent net IRR and 1.7x investment multiple, according to the latest fund performance data from the California Public Employees’ Retirement System as of end-March.

Fund III will follow the same strategy as PAG’s previous vehicle, focusing on buyouts in Australia, China, India, Japan, South Korea, South-East Asia. In April, PAG joined Joyson Electronics and Future Industry Investment Fund to complete the $1.58 billion acquisition of Japanese auto-parts maker Takata Corporation.

PAG’s Fund III is among a growing list of mega, pan-Asia fund closes this year. Hillhouse Capital Group collected $10.6 billion in September for Hillhouse Fund IV, the largest eve Asia-dedicated fund. The Carlyle Group raised $6.55 billion in June for its fifth Asia buyout vehicle, while Blackstone raised $2.3 billion in the same month for its debut Asia buyout fund.

PAG manages $30 billion in capital across private equity, real estate and absolute return strategies. Blackstone picked up an undisclosed minority stake in the firm in April via its Strategic Capital Holdings Fund.