PAG raises $900m for Asian distressed assets

As distressed investment managers around the globe prepare for opportunities in the sinking markets, PAG has closed its first-ever distressed fund for Asian assets from distressed sellers.

PAG has closed its debut distressed investment fund on $900 million, beating its target of around $700 million for investments in Asian assets from forced European and US sellers, according to people with knowledge of the fundraising.

PAG could not be reached for comment. Park Hill Group worked as placement agent for the fundraising.

PAG was able to attract limited partners from around the world, including investors from Asia, but also the Europe and US, said one person.

The firm, founded in 2002, has also been in the market raising its primary buyout fund, PAG Asia I, which held a first close on $1.7 billion in July. PAG has $7 billion in funds under management across private equity, real estate and hedge funds and special situations.

PAG grew its distressed investment team in 2009 when it poached a team from Deutsche Bank’s Asia-Pacific distressed products group. Anshumann Woodhull, Kanak Kapur, Anil Gorthy and Stuart Blieschke joined the firm to look for distressed debt and other credit opportunities in Asia.

The team reports to PAG managing partner Chris Gradel, who said at the time the distressed opportunities in Asia were “profound”. Weijian Shan, a former senior partner at TPG Capital, is the chairman and chief executive officer of PAG.

The firm has invested in distressed assets prior to launching its Pacific Alliance Asia Special Situations Fund, through two other vehicles called the Pacific Alliance Asia Opportunity Fund, a closed-end hedge fund that listed on London’s AIM market in 2006, and the Pacific Alliance Asia Opportunity Fund, also a hedge fund.

Flush with fresh capital from the fund, PAG should be well positioned to take advantage of distressed banks and corporations desperate to raise capital by selling assets at good prices. Distressed managers around the world have been positioning to seize opportunities in the wobbling markets as struggling financial institutions, corporations and governments try to figure out ways of reducing debt.

Recently, TPG Capital launched its first-ever distressed investment fund called TPG Opportunities Partners II, which is targeting $1.5 billion. The fund will focus on investments in non-performing loans, distressed-for-control and special situations on a global basis.