PAG nears final close of $2.5bn buyout fund

The Hong Kong-based private equity firm is one step closer to its final close thanks to a $100m commitment from US pension fund, CalPERS.

The California Public Employees’ Retirement System has committed $100 million to PAG’s latest $2.5 billion fund PAG Asia I, which is “nearing” its final close, a market source told PE Asia.

CalPERS joins fellow US pension fund, the California State Teachers’ Retirement System, as an LP in the fund.

The firm has been raising the fund for around 18 months and completed a first close in July last year on $1.7 billion, PE Asia reported earlier. The fund is sector agnostic but will target buyouts in the Asia-Pacific region. After the first close, chief executive of PAG Weijian Shan at the time said the firm expected a final close in the coming months.

Since launching the fund, PAG has already made a number of investments including a $250 million investment in Chinese healthcare business Bicon Pharmaceuticals and the $300 million backing of Haitong Securities' Hong Kong listing. 

PAG chief executive Weijian Shan talked to PEA earlier this year about the firm's control-oriented approach in China.

In the same round of funding, CalPERS also made allocations to US funds including a $500 million separate account with The Blackstone Group, as reported by sister-publication Private Equity International.

The $500 million account will be managed through Blackstone’s Tactical Opportunities business, which is comprised of a number of separately managed accounts, targeting investments that would not fit in the firm’s current private equity, real estate and credit mandates, multiple sources told PEI.

CalPERS also invested $400 into Cerberus Institutional Partners’ distressed fund and $100 million to Credit Suisse's emerging manager fund, which will invest in emerging managers raising their first, second or third funds, according to Reuters.

CalPERS is one of private equity’s most prominent limited partners. Its private equity portfolio includes $32.1 billion in holdings, 14 percent of its overall allocation, as of 31 January, according to state documents.