HONG KONG, Aug 19 (Reuters) – Asia-focused investment firm PAG plans to raise a buyout fund of around $4 billion, three people with knowledge of the matter said on Wednesday, in a test on investor appetite as it diversifies its portfolio.
PAG has informed limited partners, who invest in its funds, of the fundraising but has not finalised the target size, said the people.
The firm, whose private equity co-heads are based in Mumbai and Shanghai, is looking at a similar size to its previous buyout fund which closed in 2024 at $4 billion, the people said.
One of the people said the fund would be in the range of $4 billion to $5 billion with a first fundraising cut-off by year-end.
PAG declined to comment. Reuters first reported the fundraising plan earlier on Wednesday.
PAG has been seeking a more balanced portfolio since its last buyout fund, to diversify from a historically heavy focus on China, the people said.
It aimed to raise $9 billion in its fourth buyout fund in late 2021 but closed it at $4 billion three years later, as the coronavirus pandemic, regulatory tightening in China and escalating Sino-U.S. tension kept North America-based investors largely away from the world’s second-largest economy.
That fund was evenly invested across Australia, China, Japan and India, a fourth person with knowledge of PAG’s plans said.
The firm has returned over $7 billion of capital to fund investors in the last 18 months with the bulk coming from China assets, said the person.
Asia-based buyout firms have raised $7.4 billion in new funds this year, Preqin data showed.
By comparison, U.S. and Europe-based buyout firms including EQT, Bain Capital and Blackstone this year have raised nearly $40 billion in total for pan-Asia funds, which are more focused on Japan and India, among other Asian markets.
Foreign investors have warmed to China since late last year due to strong capital markets onshore and in Hong Kong, fuelled by AI interest and chip companies that brought about some long-awaited exits for investors.
Greater China venture capital firms have raised $9 billion so far this year, Preqin data showed.
HSG, formerly Sequoia China, aims to raise at least $1.2 billion in a fund for early-stage investments, said two separate people with knowledge of the matter.
The firm, led by veteran tech investor Neil Shen, also plans to establish a growth investment fund next year, the people said.
HSG declined to comment. Bloomberg first reported HSG’s fundraising plan on Tuesday.
All sources declined to be identified as they were not authorised to speak to the media.
Other firms raising new Asia-focused funds include Hillhouse Investment which targets $7 billion and KKR & Co which seeks at least $15 billion, Reuters has reported.
(Reporting by Kane Wu in Hong Kong and Yantoultra Ngui in Singapore; Editing by Christopher Cushing)
By Kane Wu and Yantoultra Ngui