Side Letter: JPMAM’s growth entry; ICG’s $40bn target; US-China chills

JPMorgan Asset Management has thrown its hat into the growth equity ring as demand for the strategy soars. Plus: what you need to know about Thailand's PE market (there's more than you think) and ICG has lofty fundraising ambitions. Here's today's brief, for our valued subscribers only.

They said it

“This year we expect the market to surpass $100 billion for the very first time.”

Verdun Perry, global head of Blackstone’s Strategic Partners secondaries unit, tells Bloomberg the secondaries market will hit a milestone this year.

Just happened

Growth equity’s newest entrant
Yesterday, we explored why demand for growth equity is soaring. Coincidentally, JPMorgan Asset Management chose the same day to disclose the launch of its own growth equity platform. The firm has tapped Christopher Dawe, former co-head of private investments at Goldman Sachs, to lead the arm and Osei Van Horne, co-founder of Wells Fargo’s tech growth equity practice, to lead its sustainable growth investments.

The bank joins a host of firms entering this space: Blackstone raised $4.5 billion for the largest debut growth fund in March, while EQT and Carlyle are both expected to launch new offerings of their own. You can read the second instalment of Private Equity International‘s latest Growth Equity Special Report here.

Thai’s the limit
Readers could be forgiven for assuming Thailand’s PE market is the preserve of risk-friendly DFIs. In reality, the challenge for sponsors is not political or economic instability, but rather the rude health of its capital markets. Those PE firms able to stand out in a market dominated by lending and listings have found themselves in an enviable niche, with limited competition and some exciting return prospects. We’ve outlined Thailand’s key players, deal environment and long-term outlook in this handy beginner’s guide.

ICG’s $40bn
European debt giant ICG expects to raise $40 billion over the coming four years, chief executive Benoît Durteste said on a Tuesday earnings call. Fundraising should reach a high-point next year, with the firm seeking €7 billion for its eighth European debt fund and $5 billion for its fourth GP-led secondaries fund. ICG raised $10.6 billion in the year to end-March, 19 percent more than in 2020 and bringing third-party AUM to $56.2 billion.


US-China fallout
President Biden last week signed an executive order clarifying and expanding Trump-era restrictions on US investments into certain Chinese companies. While the EO so far only applies to listed companies, Side Letter asked Chen Zhu, a Hong Kong-based partner at law firm Morrison & Foerster, whether there could be implications for PE. Here’s his take:

“PE investments are not directly impacted unless the investments are in publicly traded securities (for example, a US PE fund would be prohibited from doing a take-private transaction of a designated, publicly listed company). Beyond what is specifically prohibited by the EO, however, these sanctions will likely have a chilling effect on US parties’ dealings generally with the designated companies, and with other Chinese companies linked to the defence and surveillance technology sectors. There will also likely be a negative impact on the valuations of these categories of companies.”

Deteriorating relations between the two nations have prompted concerns over diminished US appetites for Chinese GPs, a dynamic we explored last year.

Shooting for the Moon
Fundraising platform Moonfare is seeking €100 million for its second vehicle intended to provide investors with at least €50,000 and access to some of the world’s largest buyout funds, (press release here). Moonfare raised €70 million from 425 investors last year for Buyout Portfolio I, which backed nine funds, including the €15.6 billion EQT IX and $15 billion KKR Asian Fund IV. Dive into our coverage of the democratisation of private markets here.

Schroders overhaul
Schroders has collected all of its private assets brands under one unit (press release here). Schroders Capital will oversee £46.1 billion ($65 billion; €54 billion), comprising the group’s PE, private debt, real estate and infra investments, among others. The combined business will also include impact arm BlueOrchard, which will retain its branding.

Dig deeper

Institution: Korea Post
Headquarters: Sejong-si, South Korea
AUM: 133.86 trillion Korean won
Allocation to alternatives: 8.0%

Korea Post Insurance, the investment unit of Korea Post has approved $197 million-worth of commitments to two buyout funds, a contact at the South Korean government agency informed PEI.

The commitments comprised $100 million to KKR North America Fund XIII and €80 million to EQT IX.

The 133.86 trillion Korean won ($119.8 billion; €98.8 billion) government agency currently has a 4 percent allocation to private equity. The overall allocation to alternative investments stands at 8 percent.

Korea Post’s recent private equity commitments have targeted buyout, secondaries and debt vehicles across multiple regions.

For more information on Korea Post, as well as more than 5,900 other institutions, check out the PEI database.

Today’s letter was prepared by Alex Lynn with Adam Le and Carmela Mendoza.