NewQuest Capital Partners, a Hong Kong-based direct secondaries firm, has deployed about two thirds of its latest secondaries fund as activity in Asia continues to grow.
The firm currently holds eight portfolio companies in NewQuest Asia Fund II, mostly in China, and is expecting to complete a deal in India in the second half of this year, Bonnie Lo, a partner at NewQuest, told Secondaries Investor.
“Our average investment size for Fund II is around $15 million to $35 million per company, but we have gone above that for companies we like as well,” Lo said, adding the firm had already started giving distributions back to investors in the second fund. The 60 percent investment figure includes capital returned that the firm has recycled.
NewQuest Asia Fund II is the firm’s second fund focusing on direct secondaries deals in Asia. The vehicle closed on $316 million in June last year, beating its $300 million target after seven months of fundraising, according to PEI’s Research and Analytics division.
In 2014, NewQuest used that fund to take plant operator China Hydro Electric private in a deal reportedly worth $190 million, and this year, the firm was part of a group including CDC Group, CX Partners and Bajaj that reportedly invested 3 billion Indian rupees ($45 million; €40 million) in microfinance firm Ujjivan.
Deal flow in Asian secondaries as a whole has grown to about 10 percent from 5 percent of the global secondaries market over the last five years, according to market participants.
NewQuest was founded in 2011 and acquired a portfolio of over 20 investments when it spun out of Bank of America Merrill Lynch’s Asian Private Equity team. The firm manages over $700 million across its two funds and invests in the Asia-Pacific region, according to its website.