(Bloomberg) — TPG Inc. will soon close its eighth Asian buyout fund at about $5 billion, with the new portfolio cutting its allocation to China by more than half from its previous regional fund, according to people familiar with the matter. He plans to do so.
Most Read Articles on Bloomberg
The investment firm plans to put about 10% of its Asia VIII pool into China, up from about 25% of the fund's previous invested capital, said the person, who asked not to be identified because the information is private. The amount will be reduced. TPG will allocate more than 80% to Australia, India and Southeast Asia, up from 70% in its predecessor fund, the people said. The rest will go to Korea.
Approximately $2 billion of the pool has already been invested, with zero investments so far in China. As a result, the fund got off to a strong start with a net internal rate of return of 129%, according to its results last month. About 70% of the initial spending went to India and Australia.
TPG's move into China through new fund comes as Wall Street rivals from Carlyle Group to Warburg Pincus diversify away from the country amid concerns about economic growth and rising political tensions with the United States. is likely to have the lowest exposure of any asset manager in the world. Japan and India are among the countries that will benefit from capital flowing to countries where they can expect higher returns.
TPG plans to announce the final close of its Asia VIII fund early next month. A spokesperson declined to comment on details.
Greater China, the region's private equity powerhouse, suffered the biggest contraction in deal activity in 2022, with deal volumes down 53% year-on-year. This has shrunk Greater China's share of Asia-Pacific trade to 31%, a nine-year low, according to a Bain & Company report.
TPG's $4.6 billion Asia VII fund has a 14% net return driven by Chinese investments, according to the official and public filings.
Most Read Articles on Bloomberg Businessweek
©2024 Bloomberg LP
