Morgan Stanley, the global investment bank, has raised its debut $515 million (€416 million) Asia fund – Morgan Stanley Private Equity Asia LP – according to a Reuters report.
Details of individual investors in the fund have not been disclosed. However, it is reported that about $350 million came from institutions including US endowment funds, $100 million from high net worth individuals and the remainder from Morgan Stanley and some of its most senior employees.
Morgan Stanley has been an active investor in Asia for some time, committing funding from its balance sheet. Notably, it achieved a 14x return on cash invested when Chinese life assurance business Ping An was sold to HSBC Holdings for $1.1 billion in May this year. Morgan Stanley and Goldman Sachs had originally invested a combined $70 million in the firm in 1994.
Morgan Stanley also invested in Mengniu Dairy, a Chinese dairy products manufacturer, alongside Actis and CDH China in 2002. Mengniu, which grew rapidly under private equity ownership, floated on the Hong Kong Stock Exchange in June 2004.
Asian fundraisings have continued to be extremely popular in the face of a tail-off of investment activity in the region in the first six months of 2005, with deal volume down 48 percent to $2.2 billion. Recent fund closings have included pan-Asian fund CVC Asia ($2 billion); Affinity Equity Partners of Hong Kong ($700 million); and Australia’s CHAMP Private Equity ($730 million).
Funds still in the market include JP Morgan Partners Asia, which is aiming for $1 billion-plus; and MBK Partners, the vehicle headed by former Carlyle Group executive Michael Kim, which in June had raised $750 million on its way to a target of up to $1.5 billion.