Baring Private Equity Asia is beginning fund-raising for a new $1.75 billion Asia-focused fund, said two people with knowledge of the firm's plans.
Throughout Asia, analysts and bankers see opportunity for bigger returns in the coming months as Asian stock markets rise. PriceWaterhouseCoopers said in a July report that initial public offerings in mainland China are expected to raise more than $73.8 billion by the end of 2010.
Hong Kong-based Baring Private Equity Asia closed its previous fund, a $1.52 billion investment vehicle, in May 2008.
Among recent deals, in November 2009 the firm invested $135 million in a Singapore-listed candy maker, Hsu Fu Chi International Ltd. (AS5.SG). In October 2009, Baring invested $42 million in PERA Global, a developer of specialized software for engineers.
The two deals reflect Baring's historical focus on China, but the firm also has made significant investments in India. In 2007, Baring joined ICICI Ventures, a subsidiary of the Indian financial services firm ICICI Bank Ltd. (IBN 532174.BY), in a $44 million investment in Karvy Stock Broking Ltd.
Baring Private Equity Asia's previous funds invested in Japan and Southeast Asia as well.
Jean Eric Salata, founder and chief executive of the firm, declined to comment.
In its previous funds, Baring invested in the alternative energy, media and financial services, and consumer-facing industries. The firm has experience investing in heavy industry as well, but had played down those investments in its fourth fund, favoring the sectors that the Chinese government is looking to promote, such as services and technology.
Baring Private Equity Asia is a diversified fund that invests in both growth equity and buyouts. Its fourth fund was intended to have a 60-40 split between growth equity and buyouts at the time of its close, according to an interview at the time with Salata.
The firm was originally part of ING Groep NV (ING INGA.AE), but became independent after a management buyout in 2000.
Investors in the firm's last fund included longtime backers the Pennsylvania Public School Employees' Retirement System and Global Investment House and a slew of new investors, including the Ontario Municipal Employees Retirement System, Partners Group AG, the Universities Superannuation Scheme of the U.K.and Goldman Sachs Asset Management.
The firm's third fund was the top-performing vehicle of its vintage in Asia at the time that Baring closed its fourth fund, with a net internal rate of return to investors of 126% as of March 31, 2008, according to the firm.
