HSBC Asia closes third fund on $700m

HSBC Private Equity Asia, the Asian private equity arm of the HSBC Group, has posted a final closing of its third fund on US$700 million.

HSBC Private Equity Asia (HPEA) has closed The HSBC Private Equity Fund 3 Limited (HPEF 3) after receiving commitments of US$700 million (€521 million). In so doing, the fund reached its original target size. 

Incorporated in the Cayman Islands, HPEF 3 will make private equity investments in mid-market Asian companies that are seeking capital to expand existing operations or to fund management buyouts. The fund will focus primarily on opportunities in China, India, Malaysia, Singapore, South Korea, Taiwan and Thailand.

Said George Raffini, managing director of HPEA: “We are pleased to have achieved the targeted amount for the fundraising as we are seeing an increase in private equity deal flow across much of the region.”

In a statement, HPEA said the fund had already invested approximately US$110 million in companies including STX Shipbuilding, a South Korea-based shipbuilder, and ON*Media Corporation, a programme provider to the Korean cable television industry.

HPEF 3 is the successor fund to HPEF 2, which closed on US$525 million in 1998, and HPEF LP, which raised commitments of US$250 million in 1995.

The latest fundraising effort comes amid a strong year for private equity fundraisings in Asia. According to figures from the Asian Venture Capital Journal, firms in the region raised $5.03 billion in fresh capital during the first half of 2004, compared with $3.32 billion in the whole of last year.

Last month, Hong Kong-based Affinity Equity Partners – a spinout from UBS – closed its Fund II on US$700 million, while the UK’s London Asia teamed up with New York-based Global Emerging Markets to raise a US$200 million fund for investment in China. Last week, Asian mezzanine fund Kendall Court Capital Partners announced a first closing of its debut fund on US$35 million.

HPEA is the private equity arm of the HSBC Group, the global banking and financial services organisation. Since inception in 1988, HPEA and its affiliates have raised and managed Asian private equity funds with committed capital of approximately US$1.7 billion.