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Private equity fund CVC raises $6.8 billion for its sixth Asia fund

SYDNEY/HONG KONG (Reuters) - Global private equity fund CVC said on Wednesday it had raised $6.8 billion for its sixth Asia fund, its largest to date, showcasing strong investor demand in a challenging fundraising environment.

The fund, exceeding its $6 billion target, is 50% larger than its fifth Asia fund, CVC said in a statement. That fund raised $4.5 billion in 2020.

CVC said it increased the fund size because of demand from new and returning investors.

The fundraising shows investors are still willing to commit capital to established global investment institutions even as they confront geopolitical uncertainties, a higher interest environment, market volatility and macroeconomic headwinds in many markets.

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U.S.-based Bain Capital in November completed the final close of its fifth pan-Asia private equity fund at $7.1 billion, the largest such fund raised in 2023, exceeding its target by 40%.

CVC's fundraising also comes as global investors have been cautious about deploying capital in China due to an economic slowdown, regulatory crackdown and Sino-U.S. tensions - all of which cast a shadow over Asia funds with a heavier allocation to the country.

Overall, a total of $61 billion was raised in 2023 for Asia-focused funds, less than half of the amount in 2022, Preqin data showed.

The Europe-based firm said its sixth fund would focus on control, co-control and partnership investments in consumer and services sector businesses across Asia.

Investors in CVC's new Asia investment vehicle include Canadian Pension Plan Investment Board and The Oregon Public Employees Retirement System, public disclosures showed.

CVC has $199 billion of assets under management globally across seven investment strategies, the fund said.

It has made more than 80 acquisitions in Asia since 1999 and has raised over $21 billion across Asia-focused funds, the firm said.

CVC's fifth Asia fund had a 23.2% net internal rate of return as of June 30, 2023, according to public disclosures of its fund investor California Public Employees' Retirement System.

Its portfolio in the region includes clothing brand A Bathing Ape, Indian cricket team Gujarat Titans and funeral services provider Nirvana.

On Monday, Australia's APM Human Services International said investment vehicles owned by CVC Asia Pacific would acquire the company for A$1.47 billion ($959.76 million).

The firm is also considering selling its minority stake in Vietnam's fourth biggest non-state owned commercial lender, Asia Commercial Bank (ACB), Reuters reported in January.

CVC, Europe's biggest buyout group, in November dropped its plan to raise $1 billion in an Amsterdam initial public offering due to unfavourable market conditions, Reuters has reported.

(Reporting by Scott Murdoch in Sydney and Kane Wu in Hong Kong; Editing by Tom Hogue and David Evans)