This Reuters report says Warburg Pincus LLC was preparing to raise a second China-focused private equity fund of up to $4 billion.
Sources told Reuters the U.S. investment firm planned to formally launch the fundraising early the following year. The timing came after Warburg Pincus joined Ant Financial’s $14 billion financing round in June.
The new vehicle was expected to work alongside the firm’s latest global private equity fund, which sources said was due to close in the coming months. Those sources said the two funds would split future China investments evenly.
Warburg Pincus declined to comment.
The proposed raise reflected the wider appetite for Asian acquisitions, especially in China, where investors have been drawn by rapid economic growth and a growing pool of technology companies. By mid-November, Asia-focused private equity managers had raised a combined $49 billion in dollar-denominated funds for the region, up from $37.8 billion over the same period a year earlier, according to Preqin.
Other large fundraisings had already lifted the market. Hillhouse Capital raised Asia’s biggest PE fund in September at $10.6 billion. In June, Blackstone Group said it had raised about $9.4 billion for two new funds, including the largest-ever Asia real estate fund and its first PE fund for the region.
Warburg Pincus, founded in 1966, was an early entrant into China and made its first investment there in 1994. Sources said the second China fund would continue backing healthcare, financial services, technology, consumer and real estate businesses.
The firm’s China portfolio included ESR, the pan-Asia logistics real estate company that planned a $1.5 billion Hong Kong IPO next year, according to IFR, as well as NIO and ZTO Express, both listed in New York.
Warburg Pincus’s first China fund raised $2 billion in late 2016. Disclosures from one limited partner, the Washington State Investment Board, showed the fund had generated a 27.8 percent net internal rate of return as of the end of June.
Reporting by Julie Zhu and Kane Wu; Editing by Stephen Coates.
