PAG targets roughly $4bn for new Asia buyout fund

Asia-focused investment firm PAG is preparing to raise around $4bn for a new buyout fund, according a report by Reuters citing unnamed people familiar with the plans, as it seeks to broaden its investment footprint beyond its historically strong exposure to China.

The firm has begun discussions with limited partners about the fundraising, although the final target has yet to be set. The vehicle could ultimately target between $4bn and $5bn, with an initial fundraising deadline expected before the end of this year, the sources said.

The proposed fund would be broadly comparable with PAG’s previous buyout vehicle, which secured $4bn at its final close in 2024.

PAG’s private equity business is led by co-heads based in Mumbai and Shanghai. The firm is seeking a more geographically balanced portfolio following the close of its previous fund, which was invested across Australia, China, Japan and India.

The strategy marks a shift from PAG’s earlier emphasis on China. Its fourth buyout fund was initially expected to raise about $9bn when the fundraising began in 2021, but the final size was reduced to $4bn amid the impact of the Covid-19 pandemic, tighter Chinese regulation and heightened tensions between Beijing and Washington.

PAG has since been returning capital to investors, with more than $7bn distributed over the past 18 months, according to one person familiar with the firm’s plans. A significant proportion of those proceeds came from investments in China.

The fundraising comes as competition for Asia-focused private equity capital remains intense. Preqin data shows that Asia-based buyout managers have raised about $7.4bn through new funds so far this year.

By comparison, large global firms with significant Asian strategies have secured substantially more. EQT, Bain Capital and Blackstone have collectively raised close to $40bn for pan-Asian private equity vehicles this year, with strategies increasingly focused on markets including Japan and India.

Other major managers are also seeking fresh capital for the region. Hillhouse Investment is targeting a $7bn Asia private equity fund, while KKR is seeking to raise at least $15bn for a new Asia-focused vehicle.