Warburg Pincus Sets Up $4.25 Billion Fund To Invest In Chinese And Southeast Asian Companies

By Dan Anderson • Jun 30, 2019
  • Private equity firm Warburg Pincus announced it closed the $4.25 billion China-Southeast Asia II, L.P. for investing in Chinese and Southeast Asian portfolio companies

Leading global private equity firm Warburg Pincus announced it has successfully closed the Warburg Pincus China-Southeast Asia II, L.P. (“Warburg Pincus China-SEA II”). Warburg Pincus China-SEA II is a $4.25 billion companion fund that will invest in Chinese and Southeast Asian portfolio companies alongside the Warburg Pincus Global Growth, L.P. (“WPGG”) — which is a $14.8 billion global and growth-focused private equity fund that closed in late 2018.

Warburg Pincus China-SEA II is also considered the successor fund to the Warburg Pincus China, L.P, a $2.2 billion companion fund that closed in December 2016. Within China, Warburg Pincus is known as Hua Ping (华平).

The Warburg Pincus China-SEA II fund launched in January 2019 and was targeting a fund size of $3.5 billion. And Warburg Pincus China-SEA II received commitments in excess of the $4.25 billion hard cap for the fund that was set during the fundraising. The combination of the capital committed to Warburg Pincus China-SEA II and the capital from WPGG to be invested in the region alongside Warburg Pincus China-SEA II gives Warburg Pincus one of the largest dedicated pools of capital in the private equity industry for China and Southeast Asian opportunities.

“We are pleased to announce the closing of our second companion fund focused on China and Southeast Asia,” said Warburg Pincus co-CEOs Charles R. Kaye and Joseph P. Landy in a statement. “This year the firm is celebrating the 25th anniversary of the founding of our business in China and this new fund underlines and reinforces our long and successful presence in China and the expansion of our investment platform into Southeast Asia in recent years.  We have now invested more than $11bn into more than 120 companies in China and Southeast Asia, generating significant returns and distributions for our investors. The strong demand for Warburg Pincus China-Southeast Asia II reflects our established track record, our talented investment team, and the opportunities our Limited Partners see for growth investing in China and Southeast Asia.”

The Warburg Pincus China-Southeast Asia’s Limited Partners includes existing investors in Warburg Pincus’ current funds along with new investors to the firm. And it includes a diversified mix of leading public/private pension funds, sovereign wealth funds, insurance companies, endowments, foundations, family offices, and high-net-worth individuals.

“Over our 25-year history in China, we have partnered with some of the most successful entrepreneurs and companies in the country and we have seen growing opportunities in recent years driven by those relationships and our success,” added Julian Cheng — Warburg Managing Director and Co-Head of China. “With the significant capital from this new fund, paired with capital from our Warburg Pincus Global Growth Fund, we are well positioned to continue our leadership as one of the longest-standing and most active investors in the region.”

This new fund is going to continue Warburg Pincus’ thesis-driven and sector-focused approach to growth investing in China and Southeast. And it will partner with entrepreneurs and management teams for building companies of scale and sustainable value. The five sectors that the fund will focus on include consumer and services, healthcare, real estate, financial services, and technology, media and telecommunications (TMT).

“We attribute our success in the region to our relationships with entrepreneurs and our ability to consistently identify long-term, secular growth themes and trends over the last 25 years,” explained Warburg Managing Director and Co-Head of China Frank Wei. “We see continued growth opportunities in the areas of mobility, consumption, urbanization, mobile technology, healthcare, and the ongoing evolution of the financial sector. This new Warburg Pincus China-Southeast Asia Fund provides us with additional capital to continue to back these high-growth businesses in China and throughout Southeast Asia.”

Warburg Pincus’ current investments in China and Southeast Asia include Amcare, ANE Logistics, Ant Financial, ARA, China Kidswant, D&J China, ESR Group, Go-Jek, Hygeia, Jinxin Fertility, Liepin, Mofang, NIO, Vincom Retail, Yuanfudao, and ZTO Express.

“In recent years, from our Singapore base, Warburg Pincus has become one of the largest and most active investors in Southeast Asia, with a particular emphasis on Vietnam, Indonesia and Singapore. Southeast Asia is a large and growing market for us, exhibiting many of the strong investment themes and trends which have driven our China business over the last 25 years,” noted Warburg Managing Director and Head of Southeast Asia Jeffrey Perlman. “This new fund, along with our growing team in Singapore and our recent successes in the region, will allow us to build our franchise further in Southeast Asia.”

Currently, Warburg Pincus has over $62 billion in total private equity assets under management. And the company has an active portfolio of more than 180 companies. Since being founded in 1966, Warburg Pincus raised 19 private equity funds and invested more than $74 billion in over 860 companies in over 40 countries.