Asia-focused private equity firm PAG has applied for an initial public offering that’s set to be one of the largest Hong Kong listings this year.
Goldman Sachs Group Inc. and Morgan Stanley are joint sponsors of the planned share sale, according to a filing on the stock exchange’s website, which confirmed an earlier Bloomberg News report. UBS Group AG is acting as a financial adviser.
The offering could raise as much as $2 billion, people with knowledge of the matter said. PAG is considering seeking a market capitalization of about $10 billion to $15 billion, three of the people said, asking not to be identified because the information is private.
PAG is one of Asia’s largest alternative asset managers with $50 billion under management, according to the filing. The firm, led by Chinese dealmaker Weijian Shan, runs a variety of strategies including private equity, private debt, distressed, real estate and absolute return funds.
It agreed in 2018 to sell a minority stake to Blackstone Inc.’s Strategic Capital Holdings Fund. The offering is poised to be one of Hong Kong’s biggest IPOs in a year that’s seen a drought of major share sales.
PAG hasn’t set precise terms for the offering, and details of the planned listing could change, according to the people. Some advisers have proposed a valuation of as much as $20 billion for PAG based on multiples from recent deals in the sector, though the firm may end up targeting a more conservative figure, some of the people said.
Representatives for PAG and the banks declined to comment or didn’t immediately respond to queries.
Asia’s alternative investment market is set to experience explosive growth in the coming years, with private capital assets under management on course to reach $6 trillion by 2025, according to Preqin. Bloomberg News first reported in January that PAG was speaking with advisers about a potential Hong Kong IPO.
The Hong Kong-based firm would join a number of global rivals seeking to attract investors. TPG Inc. raised $1 billion earlier this year in a U.S. IPO, while CVC Capital Partners has lined up banks for a share sale that could value it at more than $20 billion, Bloomberg News has reported.
MBK Partners, a North Asia-focused private equity firm founded by dealmaker Michael Kim, agreed to sell a $1 billion stake to Dyal Capital Partners to fuel expansion in the region, people with knowledge of the matter said in January. EQT AB agreed this month to buy Baring Private Equity Asia Ltd. for 6.8 billion euros ($7.5 billion) in the biggest-ever takeover of a private equity firm by a rival.
