Hong Kong’s equity markets may have kicked off the year on a sour note, but for private equity chieftain Shan Weijian, things couldn’t be any better.
The former TPG Capital exec has just raised $3.66 billion for his firm’s new buyout fund, PAG Asia II, bringing PAG Asia Capital’s total AUM to a staggering $15 billion.
The new fund will apparently be invested in major markets across Asia, though as Shan told the Financial Times, it may have a bit of China-centrism to it:
Mr Shan expects the most profitable opportunities to come from companies that cater to domestic demand from a rising middle class, particularly in China, and invest in entertainment, healthcare and financing firms as well as internet apps.
That said, he does see a few problems going forward, especially given the all dry powder currently locked in the Asian PE industry:
“There is always too much capacity, competition and capital,” Mr Shan said. “The key is to identify and build businesses that have barriers to entry.”
And it looks like Shan knows how to do exactly that. PAG’s first buyout fund – launched in 2011 with $2.5 billion in assets – has already returned $1.5 billion to investors, raking in a gross internal rate of return of roughly 30%.
Photo: november-13