Private equity firm TPG Capital Management has sold Chinese company HCP Packaging to Baring Asia, returning $1.55 billion in total to investors in 2015, an annual letter to its limited partners reviewed by Reuters showed.

The deal, signed in December, is one of 14 TPG was able to close across eight Asian countries this year despite choppy markets.

Private equity firms including TPG, Bain, Baring Private Equity Asia and KKR have all launched multi-billion dollar specialised funds to target growth in the region. But exiting some of these businesses has proven tough given extreme market volatility in Asia this year.

TPG had acquired HCP, which designs luxury lipstick and make-up containers for cosmetics makers such as L'Oreal, Revlon and Shiseido, from members of the founding Chen family in 2012 through its Asia V fund.

It sold the company to Baring Asia for $775 million, sources familiar with the issue told Reuters.

Among its other profitable Asian exits, a sale of a 17.5 percent stake in Indonesian bank BTPN allowed TPG to distribute $225 million to investors from that deal alone, according to details in the letter.

Other key exits included the sale of a stake in Australian healthcare operator Healthscope months after the company was listed in July.

TPG, which manages around $70 billion of assets globally, declined to comment. Baring Private Equity Asia also declined to comment.

VOLATILE MARKETS

The U.S.-based private equity player established its presence in Asia in 1994 to tap opportunities in high-growth markets. It has launched six funds in Asia. The latest, Asia VI, has raised more than $3 billion.

Despite volatile markets and uncertainty around China's economy, TPG invested $577 million from its Asia VI fund in 2015, bringing the total invested capital to $1.4 billion, according to the letter. An additional $338 million was co-invested.

The fund targets Asia's rising middle-class by focusing on consumer demand, healthcare and financial services.

Unusual for Asia where minority investments by foreign players are the norm, TPG has effective control of around 93 percent of the portfolio of its Asia VI fund.

Other relevant transactions carried out by TPG this year were the purchase of 50 percent of spirit maker Myanmar Distillery, which together with an investment in telecom infrastructure group Apollo Towers Myanmar makes TPG one of the most active private equity investors in the country.

Looking ahead, TPG anticipates more volatility and uncertainty, but has pledged not to shy away from interesting buys.

"We anticipate the current climate of uncertainty to continue into 2016, creating more unique opportunities for us to explore," TPG said in the letter to investors.

 

reuters.com

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