CVC, a global private equity fund, announced that it successfully secured $6.8 billion for its sixth Asia fund, marking its largest fund to date. Despite a challenging fundraising climate, the fund surpassed its initial $6 billion target, indicating robust investor interest. This latest fund, which is 50% larger than its predecessor, the fifth Asia fund raised in 2020 with $4.5 billion, reflects increased demand from both new and existing investors, prompting CVC to expand its size.
The fundraising demonstrates that investors remain eager to allocate capital to well-established global investment firms despite facing geopolitical uncertainties, elevated interest rates, market fluctuations, and macroeconomic challenges across various regions. In November, Bain Capital, headquartered in the U.S., successfully concluded the final close of its fifth pan-Asia private equity fund, reaching $7.1 billion. This marked the largest fund raised in 2023, surpassing its target by 40%.
CVC's fundraising also comes as global investors have been cautious about deploying capital in China due to an economic slowdown, regulatory crackdown and Sino-U.S. tensions - all of which cast a shadow over Asia funds with a heavier allocation to the country. Overall, a total of $61 billion was raised in 2023 for Asia-focused funds, less than half of the amount in 2022, data showed. The Europe-based firm said its sixth fund would focus on control, co-control and partnership investments in consumer and services sector businesses across Asia.
According to public disclosures, investors participating in CVC's latest Asia investment initiative encompass the Canadian Pension Plan Investment Board and The Oregon Public Employees Retirement System. CVC, with $199 billion in assets under management worldwide spanning seven investment strategies, disclosed this information. The firm has executed over 80 acquisitions in Asia since 1999 and has mobilized over $21 billion through funds focused on the Asian market.
Public disclosures from the California Public Employees' Retirement System indicate that as of June 30, 2023, CVC's fifth Asia fund boasted a net internal rate of return of 23.2%. Within the region, its portfolio comprises notable assets such as the clothing brand A Bathing Ape, the Indian cricket team Gujarat Titans, and the funeral services provider Nirvana. Additionally, Australia's APM Human Services International announced that entities owned by CVC Asia Pacific would acquire the company for A$1.47 billion.