TPG joins Asia’s rush for mid-sized buyouts with latest fund

Pedestrians in Pudong's Lujiazui Financial District in Shanghai, China. Bloomberg

TPG Inc. is among large alternative asset managers now seeking money to back mid-sized investments in Asia, a move away from its traditional focus on bigger deals.

San Francisco-based TPG had its first closing for an Asia emerging companies fund in the first quarter, according to people familiar, who asked not to be named discussing private information. A representative for TPG declined to comment.

Mega deals have been slow to return in Asia, in part due to subdued activity in China. That’s providing an impetus for big buyout funds to increasingly compete in the mid-market space, where deal sizes are typically between $50 million to $100 million.

“We’re not seeing as many big ticket investments in Asia partly because of a retreat from China where most of those deals used to happen,” said Sam Padgett, who leads the private equity origination effort in Asia for Deloitte. “Instead, activity is shifting to India, Australia, Japan, where a lot of mid-cap financing is needed.”

While the number of Asia Pacific private equity buyout investment deals grew 6% to 563 in the first half of this year, the value fell nearly 14% to $45 billion, a Deloitte report showed. Japan ranked top in terms of buyout geography by deal value, followed by South Korea, in the first half. Japan was also the most popular destination by deal count, followed by Australia and New Zealand, the report showed.

Sweden-based EQT raised $1.6 billion for its Asia-focused mid-market buyout fund in May last year, more than double its initial target size of $750 million.

TPG’s last Asia buyout fund — its eighth in the region — closed in 2024 after raising about $5 billion. TPG Asia manages about $23 billion, while the firm globally has around $261 billion.

EQT has received some $11.4 billion for its ninth Asia buyout fund as of July 17, and is expected to conclude fundraising before year-end with a maximum of $14.5 billion, according to its first-half results.

“It’s a bit of winners take all for fundraising,” said Padgett. “The names that used to focus on big-ticket investments are now moving down to raise money for mid-cap investment.”