The San Diego County Employees' Retirement Association has committed up to $60 million to Baring Private Equity Asia’s fifth fund, which is targeting $1.75 billion with a hard cap of $2 billion.
The pension’s final allocation will be between $50 million to $60 million, depending on final fundraising results, as Fund V is currently oversubscribed, according to pension documents. Similar to its predecessor funds, Baring Asia V will invest in mid-market businesses in Greater China, India and Southeast Asia.
Fund V has an investment period of five years and includes a 2 percent general partner commitment. During the investment period, the firm will charge a 2 percent management fee, after which time Baring will charge 2 percent of funded commitments outstanding. Management fees will generally be offset by 80 percent of transaction and similar fees, according to pension documents.
San Diego recommended allocating to Baring Asia V based on the firm’s track record of 23 fully or partially realized investments that have generated a gross IRR of 30 percent and a 3.3x multiple, the pension said.
Established in 1997, Baring Asia makes growth capital and mid-market buyout investments in companies with enterprise values of between $100 million and $500 million in sectors such as alternative energy, media, financial services, consumer and industrial. The firm is primarily focused on investments in China, India, Japan, Singapore, Hong Kong and Taiwan.
Limited partners in Baring’s predecessor funds include public pensions such as the Pennsylvania Public School Employees’ Retirement System, the Ontario Municipal Employees’ Retirement System and the California Public Employees’ Retirement System.
Baring Asia is currently investing from Baring Asia Private Equity Fund IV, which closed on $1.5 billion in May 2008, surpassing its $1 billion target.