CVC Capital Partners has raised US$ 1.975 billion from a range of international institutional investors and high net worth individuals to fund investments in companies based in the most developed economies of the Asia Pacific region. This is the second Asian fund to be raised by CVC and is a joint venture with Citigroup.
CVC Capital Partners says its Asia Pacific II L.P., dubbed Fund II, is the biggest ever fund raised in the Asia Pacific region and underlines investor appetite for investment opportunities in the region. Fund II follows CVC’s first fundraising in the region, the CVC Capital Partners Asia Pacific L.P., which raised US$750m in 2000. This fund, which targeted business opportunities in a variety of industries and geographical locations, has invested US$526 million in 17 companies including Pacific Brands (Australia), Haitai Confectionery (South Korea), Asia Printers Group (China), Yellow Pages (Singapore) and Showa Yakuhin Kako (Japan). Fund I is now substantially invested.
With the release of Fund II, CVC reiterated its belief that the Asian buyout market will continue to provide attractive investment opportunities over the next three to five years due to structural changes in the region, which are sustaining a strong environment for rapid and sustained growth for portfolio companies. The drivers for this include the continued economic growth of China driven by its ongoing industrialization; completion of the restructuring of the economies of South East Asia and South Korea; continuing migration of manufacturing and servicing activity to Asia; continuing flow of foreign direct investment into Asia; increased focus by corporations on their core business and increased attention to return on capital; increasing availability of more sophisticated debt markets; growing familiarity among managers with the concept of management buyouts; growth in M&A markets in the region; more favourable legal and regulatory frameworks for facilitating the divestiture of businesses as acquisition targets.