NewQuest deploys roughly $200m in 2014

Hong Kong-based NewQuest Partners is seeing a more robust pipeline build up in Asia’s direct secondaries market, particularly in 2004- to 2007-vintage funds.

NewQuest Partners deployed roughly $200 million in Asian direct secondaries deals last year and expects even more deal flow in 2015, according to the firm.

Amit Gupta
Amit Gupta

“We are seeing a more robust pipeline building up for 2015 through 2018, given the impending end of fund life transactions for 2004 to 2007 vintages,” said partner and chief operating officer Amit Gupta.

Hong Kong-based NewQuest closed its second fund on $326 million, surpassing its $300 million target, in mid-2014. The fund was smaller than its $390 million predecessor, which was used to fund a portfolio acquisition from Bank of America Merrill Lynch and had $100 million of dry powder for other deals.

NewQuest attributes its fundraising success to past performance. Fund I distributed all of its capital called within three years of deployment and between Fund I and Fund II, NewQuest distributed more than $150 million back to LPs last year.

Fund II retained a number of limited partners including LGT Capital Partners and HarbourVest Partners.

“The fundraising environment was good,” said Gupta. “Established general partners with track records were able to raise money for country specific and regional strategy.”

Gupta added a lot of the region’s LPs are becoming more interested in secondaries and are looking to increase their exposure to the strategy.

“Secondary strategy is being thought of more integral part of the private equity programme as opposed to an opportunistic allocation.”

He added LPs’ previous exposure had been through global secondaries funds or through buying stakes directly in funds managed by GPs already in their portfolio.