NewQuest raises biggest-ever Asian secondaries fund

NewQuest Capital Partners has surpassed the hard-cap on its fourth fund to collect the biggest pool of capital ever dedicated to Asian secondaries.

The Hong Kong-headquartered direct secondaries firm closed NewQuest Asia Fund IV on $1 billion, exceeding its initial $850 million target and $950 million hard-cap, according to a statement. Fund IV’s hard-cap was raised to accommodate strong investor demand, the statement noted.

The move coincided with the appointment of Nitin Agarwal as managing director in Mumbai. Agarwal was previously managing director and co-head of India for CLSA Capital Partners where he oversaw the CLSA India Growth Partnership Fund, according to his LinkedIn profile.

Secondaries Investor reported in April that NewQuest was back in market targeting $850 million for Fund IV, a 60 percent increase on the amount raised for its predecessor. The 2016-vintage Fund III raised $540 million against a target of $500 million and counted Missouri Department of Transportation and Highway Patrol Employees’ Retirement System among its limited partners, according to Secondaries Investor data.

NewQuest has raised four of the five largest dedicated Asian secondaries funds, according to Secondaries Investor data. HQ Capital’s Auda Asia Secondary Fund is fifth at $250 million.

In August, NewQuest and Singapore’s GIC backed a $500 million yuan-to-dollar restructuring on a fund managed by Loyal Valley Capital. The fund contains stakes from a number of early-stage healthcare companies and Chinese ‘unicorns’ – technology companies valued at more than $1 billion – Secondaries Investor wrote at the time.

India has had a marked increase in secondaries opportunities, with HarbourVest Partners, NewQuest and TR Capital among those lining up to take advantage. Common opportunities include crisis-era GPs that raised a fund but were not able to raise another, those who were able to raise a second but not a third and teams investing in India from global funds looking for a partial or total withdrawal.

Performance concerns have been a key driver of demand for secondaries in the Asia-Pacific markets, George Maltezos, a Hong Kong-based partner at Campbell Lutyens, told sister publication Private Equity International in September.

“At the end of the day we’re dealing with emerging markets where liquidity is available during various windows, things may take longer and exits are not as buoyant as we have seen in the US,” he said. “We have tools that can help a set of stakeholders around an existing portfolio generate some liquidity, short of a forced fire sale or taking on financial leverage, and we’ve seen a lot of this in Asia over the past three years.”

– Adam Le contributed to this report.