TPG gains secondaries exposure with NewQuest stake

The acquisition of a 'significant' minority stake will help NewQuest expand its range of secondaries offerings and dealflow.

TPG Capital has acquired a stake in one of Asia’s most prominent secondaries firms, giving it a foothold in the regional market.

The firm, headquartered in Forth Worth, has acquired a “significant” minority stake in direct secondaries specialist NewQuest Capital Partners, a spokeswoman confirmed. TPG invested an undisclosed amount from the balance sheet of TPG Holdings.

NewQuest will continue to operate independently while benefiting from the brand, scale and resources of TPG’s platform, Secondaries Investor understands. The acquisition will spur expansion into “adjacent” strategies of the Asian secondaries market, in addition to NewQuest’s specialisms of direct secondaries, restructurings and spin-outs, according to the spokeswoman.

“As the alternatives landscape continues to evolve, the secondary market has emerged as an important tool for asset managers and investors to actively manage their portfolios,” said Jon Winkelried, co-chief executive of TPG. “In partnering with NewQuest, we see an opportunity to back a highly experienced team with a differentiated strategy and leading position in Asia’s rapidly growing secondary market.”

The deal marks a high-profile example of a firm acquiring a stake in another general partner’s management company. The transaction was opportunistic in nature, Secondaries Investor understands, unconnected to any fund our fundraising programme.

Dyal Capital Partners, Blackstone and AlpInvest Partners have raised or are raising dedicated funds to acquire stakes in GP management companies.

Bloomberg first reported on TPG’s investment in NewQuest.

TPG has $73 billion in assets under management across buyout, growth equity, venture capital, turnaround and debt funds.

NewQuest spun out of Bank of America Merrill Lynch’s Asian private equity team in 2011 and has offices in Hong Kong, Beijing and Mumbai. It manages three funds with aggregate commitments of $1.25 billion, according to PEI data, its most recent being the 2016-vintage, $540.5 million NewQuest Asia Fund III.

In a February report advisor Greenhill Cogent said it expected Asian secondaries to account for around 10 percent of global deal volume this year as attractive pricing draws sellers into the market.