Warburg Pincus raises $15 billion in new fund; exceeds target

Shrugging anxiety about the global crdit crunch, investors have poured a record $15 billion in to global private equity firm Warburg Pincus's largest fund, Warburg Private Equity X, that closed yesterday, exceeding the $12-billion target by 25 per cent. Warnburg will utilise the fund for investing in early stage, growth, and late-stage businesses across North America, Europe and Asia.

The invstors to the fund include  public and private pension funds, endowments and global financial institutions including the Washington State Investment Board and GE Asset Management, as well as new investors, half of whom were from outside the US, Warburg said. According to Washington State Investment Board's web site Warburg has handed investors in its 2001 fund a 22.4 per cent net internal rate of return. Its 2005 fund has generated a return of 13.6 percent so far, the web site said.

The new fund is the next in size to the €11.5-billion ($18 billion) pool raised this year by Apax Partners Worldwide LLP's. Warburg Pincus's pool is the fourth-largest US private equity fund, on par with TPG's. Blackstone Group LP manages the biggest buyout fund, at $21.7 billion, followed by Goldman Sachs Group Inc. and KKR. Leveraged buyout firms raised $82 billion in the first quarter of 2008, up from $64 billion in the last quarter of 2007.

The new York-based Warburg Pincus has not been hit by any failed investments though it has yet to recover anything from bond insurer MBIA Inc,  in which it had put in $500 million in December 2007 at $31 per share, followed by another $300 million at $12.15 per share in February as part of MBIA's $1 billion recapitalisation to avert a cut in its AAA credit rating. Warburg is MBIA's largest shareholdr with a 17-per cent stake.

The firm made its first international investment in 1983 and opened its London office in 1987 and its Hong Kong office in 1994, making it one of the early entrants in emerging markets including China, India and Central and Eastern Europe.

It has more than $35 billion of assets under management with its investments focused on a range of sectors in North America, Europe and Asia, including financial services, healthcare, industrial, technology, media and telecommunications, energy, consumer and retail and real estate.