TPG joins Asia’s rush for mid-sized buyouts with latest fund

TPG is among the large alternative asset managers now seeking money to back mid-sized investments in Asia, a move away from its traditional focus on bigger deals.

San Francisco-based TPG had its first closing for an Asia emerging companies fund in the first quarter, according to sources familiar, who asked not to be named discussing private information. A representative for TPG declined to comment.

Mega deals have been slow to return in Asia, in part due to subdued activity in China. That’s providing an impetus for big buyout funds to increasingly compete in the mid-market space, where deal sizes are typically between US$50 million to US$100 million.

“We are not seeing as many big ticket investments in Asia, partly because of a retreat from China, where most of those deals used to happen,” said Sam Padgett, who leads the private equity origination effort in Asia for Deloitte. “Instead, activity is shifting to India, Australia, and Japan, where a lot of mid-cap financing is needed.”

While the number of Asia-Pacific private equity buyout investment deals grew 6 per cent to 563 in the first half of this year, the value fell nearly 14 per cent to US$45 billion, a Deloitte report showed. Japan ranked top in terms of buyout geography by deal value, followed by South Korea, in the first half. Japan was also the most popular destination by deal count, followed by Australia and New Zealand, the report showed.

Sweden-based EQT raised US$1.6 billion for its Asia-focused mid-market buyout fund in May last year, more than double its initial target size of US$750 million.

TPG’s last Asia buyout fund, its eighth in the region, closed in 2024 after raising about US$5 billion. TPG Asia manages about US$23 billion, while the firm globally has around US$261 billion.

EQT has received some US$11.4 billion for its ninth Asia buyout fund as at Jul 17, and is expected to conclude fundraising before year-end with a maximum of US$14.5 billion, according to its first-half results.

“It’s a bit of winners take all for fundraising,” said Padgett. “The names that used to focus on big-ticket investments are now moving down to raise money for mid-cap investment.” BLOOMBERG