TORONTO, ON / ACCESSWIRE / November 23, 2020 / Finance executives at Toronto-based Hamilton Chukyo Brokerage have today commented on Blackstone Group Inc as it seeks to raise around $5 billion for its second Asia-focused private equity fund.
"Blackstone has begun to market its new equity vehicle to potential investors. It is aiming for more than double the size of its first Asia buyout fund, which closed at around $2.3 billion back in 2018," commented Anthony Roberts, Head of Institutional Trading at Hamilton Chukyo Brokerage.
Blackstone is raising increasingly-larger pools of capital as dislocations from the coronavirus pandemic provide more deal opportunities. President Jon Gray has pledged to increase the proportion of Asian investment in its entire business, which two years ago stood at just under 10%. In 2018, the U.S. investment firm raised $7.1 billion for Asia real estate investments.
The company joins KKR & Co., which is currently seeking at least $12.5 billion for its next Asia-focused fund. Since early 2019, Baring Private Equity Asia, TPG, and Warburg Pincus have raised capital totaling $15 billion, allocated for investment in the region.
After racing ahead in 2017 and 2018, Asia private equity investment fell year-on-year as exits and deal activity collapsed in Greater China in the face of ongoing trade tension, slowing economic growth, and lower level of new renminbi funds, according to data gathered at Hamilton Chukyo Brokerage. Still, over varying periods, the asset class surpassed public-market benchmarks, with the top quartile of Asia-focused funds predicting a net internal rate of return at 16 percent or more.
Blackstone is gambling that global managers hunger for Asia will continue to rise as the region experiences a quicker recovery from the pandemic than the rest of the world. The deal movement has started to pick up and could intensify going into 2021, as several transactions suspended during the spread of Covid-19 are likely to resume.
"Around 66% of Blackstone's 2018 fund has been invested so far. The firm is seeking buyout deals and companies that have board representation in Australia, Japan, Korea, and the less developed markets like China and India where acquisitions for control constitute only one-third of the overall deal-making," commented Michael Williams, Head of Private Wealth Management at Hamilton Chukyo Brokerage.
A large number of Blackstone's current holdings are in the consumer, healthcare, and technology sectors, which have profited this year from the shift to online consumption and increased demand for medical treatment.
Blackstone agreed to acquire Takeda Pharmaceutical Co.'s over-the-counter medication business for 242 billion yen ($2.3 billion) in August, its biggest private-equity takeover in Japan.
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SOURCE: Hamilton Chukyo Brokerage
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