Investment Firm TPG plans to cut down China investment to half in $5 billion Asia fund

By siliconindia  |  Monday, 25 March 2024, 15:49 IST

Investment Firm TPG plans to cut down China investment to half in $5 billion Asia fund
PG Inc. is planning to close its eighth Asia buyout fund at around $5 billion, with the new portfolio its eighth Asia buyout fund at around $5 billion. The investment company will invest 10% of its Asia VIII pool in China, from around 25% invested capital in previous funds. TPG will collect more than 80% in Australia, India and Southeast Asia from 70% predecessor fund. Rest of the amount will go to South Korea.
Nearly about $2 billion of the pool has already been invested with zero investment in China so far, which has helped the firm to earn rate of return of 129%. Around 70% of the initial spend has gone in India and Australia. 
TPG’s exposure to China through the new fund will likely be among the lowest for global asset managers as Wall Street rivals from Carlyle Group to Warburg Pincus diversify away from China amid economic growth concern and escalating political tensions with the US. In Japan and India, returns are expected to be higher. 
In the early next month TPG is planning to announce the final close of the Asia VIII fund. The region’s private equity powerhouse, Greater China has faced the biggest contraction in deal activity in 2022 which contributed 53% drop in volume from a year earlier. According to a Bain & Co. report, this incident shrank Greater China’s share of Asia-Pacific deals to a nine-year low of 31%. TPG’s $4.6 billion Asia VII fund has a net return of 14%, dragged by China investments. 

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