A Bathing Ape's main shareholder CVC Capital closes its 6th and largest Asia fund, shrugging off global economic woes

Private equity firm CVC Capital Partners said it has closed its sixth and largest Asia fund to date, shrugging off a challenging geopolitical and macroeconomic environment that has put a dent in fundraising and led many global fund managers to cut their exposure to the region.

The CVC Capital Partners Asia VI ("Asia VI") fund, with US$6.8 billion in commitments, exceeded the size of its predecessor, Asia V, by over 50 per cent. Asia V closed in 2020 at US$4.5 billion, according to the fund manager.

Asia VI initially aimed to raise US$6 billion, and the oversubscription was thanks to "strong demand from new and returning blue chip investors," the Luxembourg-headquartered fund manager said in a press release on Wednesday. With the new fund closed, the total amount CVC Capital has raised through its funds in Asia exceeds US$21 billion, making its platform "one of the leading players in the region."

Do you have questions about the biggest topics and trends from around the world? Get the answers with SCMP Knowledge, our new platform of curated content with explainers, FAQs, analyses and infographics brought to you by our award-winning team.

Asia-focused private equity funds raised US$61 billion last year, a drop of more than 50 per cent from 2022, according to Preqin, a provider of financial data.

CVC's new Asia fund will invest primarily in the consumer and services sectors across the region, taking both controlling stakes and smaller holdings alongside other investment firms.

"We have invested significantly in CVC Asia over recent years and are delighted with its excellent progress," said managing partner Rob Lucas, adding that CVC Asia is one of the growth engines for the company's private equity platform.

Globally, CVC has US$199 billion in total assets under management across seven investment strategies, including secondaries - when an investor buys an existing share in a company from another private equity firm - and infrastructure. In Asia, the firm has made more than 80 acquisitions since 1999.

Its portfolio in the region includes A Bathing Ape, or BAPE, a Japanese streetwear brand active across 23 countries worldwide, Asia Commercial Bank, a Vietnamese private commercial lender, and AHAM Capital, a Malaysian asset management firm, according to CVC's website.

The firm's China portfolio includes roadside assistance provider Fujian Jinuo, toll operator RKE International, and retail drugs store chain Xi'an Yikang Pharmacy.

CVC's announcement comes at a time when global fund managers, spooked by fundraising challenges associated with China's geopolitical and regulatory risks as well as turbulence in the country's US$8.7 trillion stock market, are scrambling to cut their exposure to the region.

A recent example is Carlyle, which sold its entire stake in McDonald's China business back to the fast food chain in November. The China operation is reportedly attracting the attention of state investors in China and the Middle East.

The first three quarters of 2023 saw private equity fundraising, investment and exits decline in the world's second-largest economy. The total amount raised across China-focused funds dropped 20 per cent to 1.35 trillion yuan (US$187.7 billion) compared to the previous year, while the number of new funds fell 2.1 per cent to 5,344, local media reported, citing data from Zero2IPO Group, a research firm.

This article originally appeared in the South China Morning Post (SCMP), the most authoritative voice reporting on China and Asia for more than a century. For more SCMP stories, please explore the SCMP app or visit the SCMP's Facebook and Twitter pages. Copyright © 2024 South China Morning Post Publishers Ltd. All rights reserved.

Copyright (c) 2024. South China Morning Post Publishers Ltd. All rights reserved.