Texas Pacific Group, one of the world’s biggest private equity groups, plans a push into Asia amid signs that Newbridge Capital, its Asian affiliate, is too small to compete with global rivals for increasingly large deals.
People close to the situation said TPG wanted to deploy significantly more capital in Asia by using its new $10bn-$12bn buy-out fund to work on deals alongside Newbridge, a joint venture with Blum Capital Partners.
The move would represent a shift from TPG’s current strategy, which left most Asian investments to Newbridge – a 12-year-old venture that is one of the pioneers of private equity in the region and recently raised a $1.5bn fund. It is understood that the business could be rebranded TPG-Newbridge.
However, people close to the situation said it was unlikely that Newbridge would disappear in the short term because of its good brand recognition and the involvement of Blum Capital.
Newbridge is expected to have first call on all TPG’s Asian deals but TPG’s latest buy-out fund may invest in certain deals, and combine resources to undertake bigger transactions.
TPG’s desire to invest directly in Asia reflects the growing size of deals in the region’s private equity market and a marked increase in international competition over the past few years.
Global funds such as Blackstone and Kohlberg Kravis Roberts have recently entered the Asian market, while rivals such as Carlyle Group and CVC Asia Pacific have raised record amounts of funds. Unlike Newbridge, some big rivals can draw on huge global funds for their Asian investments.
Buy-out deals in Asia reached an all-time high last year, according to Thomson Financial. Total private equity deals were worth more than $17bn last year, according to the Centre for Asia Private Equity Research.
David Rubenstein, a founder of Carlyle, said this month that Asia would be “the next big growth story in private equity”.
TPG, which has invested in Asian companies such as Lenovo, the Chinese computer maker, declined to comment.