Just happened

QIA’s APAC expansion

The $445 billion Qatar Investment Authority is leaning into Asia-Pacific private equity at a time when some of its western peers have grown more cautious in the region. The institution is actively seeking private equity opportunities in Japan and plans to expand its headcount in the market to that end, Abdulla Al-Kuwari, head of QIA Advisory, said on stage at the Milken Institute Asia Summit 2024 last week. “We started Japan with a team maybe three years ago – now we’re doubling it. We’re going to hire more and more people, it’s a market focus for us.”

QIA is also “in the middle of expanding into Australia, Korea and Southeast Asia”, Al-Kuwari added. “One country that stands out is India, our focus for us these days are technology companies in India that are not just only selling to the Indian market, but also selling to the US market.”

As with many of its Middle Eastern peers, little is publicly disclosed about QIA’s private equity portfolio. According to PEI data, it has recently committed to Ardian Semiconductor and Ariel Alternatives‘ $1.45 billion Project Black.

The sovereign wealth fund isn’t alone in eyeing Japan. Global GPs, as well as international and domestic investors, are seeking to increase their exposure to the market, which boasts a raft of corporate carve-out, succession and take-private opportunities. A host of Japanese private equity firms have returned to market this year seeking to capitalise on growing appetites for the country. India, too, has garnered attention, though overseas institutions have found it difficult to access at scale.

Middle Eastern institutions are proving particularly bullish in Asia-Pacific, with transaction activity rising significantly since the pandemic, according to the Global Private Capital Association. The amount of Middle Eastern capital deployed into Asia-Pacific, either investing out of a fund or via co-investments, grew by 253 percent from $2.8 billion in 2019 to $9.9 billion in 2023. India absorbed 58 percent of total capital deployed by these investors during 2020-23. China took 21 percent and Southeast Asia, 20 percent.

“There are also a small number of investors, primarily based in the Middle East, ramping up in the region,” Doug Coulter, partner and head of private equity for Asia-Pacific at LGT Capital Partners, said during Private Equity International‘s latest APAC Roundtable. “Those investors see an interesting buying opportunity, particularly in the secondaries market. But overall, it is a demanding fundraising environment, and many GPs and LPs are having to rethink their Asian strategies.”

Iberian inflows

Iberian buyout and impact shop Miura Partners has raised €800 million across a trio of closes this year. Miura Fund IV, a buyout fund targeting SMEs across Spain and Portugal, has closed on its €475 million hard-cap, per a statement Side Letter has seen exclusively. The fund launched in March 2023 with a €400 million-target, according to PEI data. It is 44 percent larger than its €330 million-predecessor, which closed in 2018, and included over €259 million of commitments from new LP relationships.

This follows a €135 million final close on Miura Impact Fund, the firm’s first solely impact-focused strategy. That fund launched in July 2022 with a €150 million-target, per PEI data. MIF backs small-cap businesses across three impact themes: healthier lives, thriving communities and regenerative planet. The trio was completed by the close of Dent&Co, a €200 million single asset continuation fund established to support ongoing growth in portfolio company Proclinic Group. That close was first unveiled in April.

“We are incredibly grateful for the trust our investors have placed in us, especially in a challenging global fundraising environment,” founding partner and chief executive Luis Seguí said in the statement. “These successful closes reflect our proven ability to partner with founders and management teams in the Iberian mid-market space, and to driving sustainable growth and value creation.”

Dividend recaps by another (lower risk) name

Not all distributions are created equal, some LPs have claimed, pointing to concerns that some NAV loans have been used to enhance funds’ DPI or to make distributions to LPs in need of liquidity, as opposed to distributions made from asset realisations.

But a panel of experts at affiliate title Private Debt Investor‘s NY Forum 2024 said that controversy has been blown out of proportion. Most NAV loans, panellists agreed, have been used for additional investments, either protective or accretive, in portfolio companies during funds’ holding periods.

Dane Graham, partner at 17Capital, said that NAV loans go towards value-accretive uses about 90 percent of the time, mostly in the form of acquisitions. And when NAV loans do get used toward distributions, it often represents a shift in fund managers’ portfolio strategy – not simply an attempt to beef up DPI.

“There are some that are used for liquidity,” Graham said, adding that it “is not in-and-of itself a bad thing”. “What is happening with some of those liquidity trades? It’s thinking about managing the portfolio differently,” Graham said. NAV loans can be a more flexible alternative to liquidity provision than dividend recapitalisations, for example, since the risk isn’t placed solely on one portfolio company. And it can be done with similar leverage levels to a dividend recap.

As Graham noted: “You can send the same [amount of] proceeds back to LPs at overall lower risk for the portfolio, and by creating that additional borrowing base you get better return at that lower risk.”

Essentials

Oxford’s new CIO

Oxford University Endowment Management has tapped its deputy CIO to lead its investment division. Neamul Mohsin will become CIO effective 1 January 2025, according to a statement. The endowment’s chief executive Sandra Robertson is stepping back from investment duties to focus on “external relations, risk management and operational excellence, and will continue to work closely with Neamul and an established investment team”, the statement said.

Mohsin joined OUem’s investment team in 2012 and became deputy CIO in August 2022, leading sourcing, diligence and day-to-day investment decisions. He also worked alongside Robertson on portfolio strategy and asset allocation.

The endowment’s AUM has grown from to in excess of £6.5 billion ($8.6 billion; €7.8 billion) on behalf of 46 investors, according to the statement. The team now counts 30 professionals. Around a third of the £3.1 billion Oxford Endowment fund was allocated to private equity as of end-2023, per its website. Launched in 2009, the vehicle has made an 8.1 percent annualised return over a ten-year period.

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