Private equity investments that hinge on expanding a target company's geographic footprint as a key to adding value will be a bigger focus for the latest crop of funds being raised for deployment in Asia.
A confluence of factors — including the growing ranks of firms looking to move beyond their home markets and the greater willingness of owners to cede control to private equity partners to get there — is supporting that trend.
Meanwhile, in a private equity industry where the biggest players have gone from strength to strength in the global fundraising sweepstakes, private equity firms focused on midmarket companies mulling their first moves abroad could be relatively well placed to benefit.
Cross-border deals are likely to make up a bigger piece of the record $4 billion fund Baring Private Equity Asia closed last month than they have for the firm's previous five funds, said Jean Eric Salata, founding partner and CEO of Hong Kong-based Barings Asia.
The growing number of entrepreneurs looking to exploit opportunities beyond their home markets now is making that cross-border theme an increasingly important one for Navis Capital Partners (Asia) Ltd. as well, said Jean-Christophe Marti, a Singapore-based senior partner with the firm.
At the end of December, Navis Capital, a Kuala Lumpur-based private equity firm with offices in six Asian countries, closed its seventh fund at $1.5 billion, confirmed Nicholas Bloy, managing partner of the firm's investment teams.