Warburg eyes SE Asia with Fund XI

After closing an $11.2 billion global fund, the private equity firm will hire a Singapore-based investment professional and expand its reach into Southeast Asia.

Warburg Pincus is preparing its team to invest in Southeast Asia for the first time, a source close to the firm told Private Equity International. 

Warburg is in the midst of hiring a Singapore-based investment professional to lead Southeast Asia operations, although a new appointment has not been announced, the source said. The firm does not have plans to open a proper Singapore office yet, however. 

Warburg closed its eleventh global private equity vehicle on $11.2 billion in May after roughly 18 months in the market. The firm has traditionally focused its developing Asia strategy on China and India, but is now actively pursuing opportunities in Southeast Asia’s high-growth economies through the new fund, the source revealed.

The representation of Asian LPs was definitely `stronger' in [Warburg's] latest fund compared to its predecessor, with the majority of new LPs coming from outside the US

Warburg joins a number of global firms ramping up their capabilities in Southeast Asia to access deals in promising markets like Indonesia. In October last year, Kohlberg Kravis Roberts opened a Singapore office to serve as a hub for Southeast Asia investments. Similarly, in March, The Riverside Company opened office in Singapore to access opportunities in Southeast Asia for the first time.

In Indonesia, The Carlyle Group just appointed a head of Indonesia investments and intends to open a Jakarta office and TPG, which is raising a $4 billion Asia fund, invests in Indonesia through its partnership with local firm Northstar.

However, Warburg is yet to close a deal in Southeast Asia. The Warburg Fund XI is so far about 20 percent deployed, making a number of those investments in Greater China. These include the $200 million investment in China Auto Rental and a $55 million investment in maternity and infant retailer China Kidswant Investment Holdings – both in July last year, PEI reported earlier. Warburg currently has 40 investment professionals focused on Greater China.

Warburg will continue to invest both in China and India actively, according to the source. In India, the firm acquired engineering products manufacturer Avtec in a secondary buyout from Actis in April, according to media reports. The news came just days after the firm sold a $500 million stake in Alliance Tire Group to KKR. 

For the new fund, Warburg garnered commitments from a wide spread of investors including sovereign wealth funds, insurance companies, pension funds and endowments, according to an earlier statement. PEI's source said that the representation of Asian LPs was definitely “stronger” in the latest fund compared to its predecessor, with a significant number of new LPs coming from outside the US.