Pan-Asian multi-asset manager PAG is weighing a $1-billion tender offer to buy back stakes in its funds from its existing limited partners (LPs), Bloomberg reported.
PAG is sounding out potential buyers, who may be required to put in a total of about $300 million for the private equity firm’s latest fund, the report said, citing unidentified sources.
The discussions are ongoing with the terms yet to be finalised, the report added.
The move comes amid macroeconomic uncertainties including a weak market for public issues, which is delaying listings and creating a tough exit route for general partners (GPs) who are under pressure to return liquidity back to their LPs.
PAG declined to comment on the development when contacted by DealStreetAsia.
A separate report earlier this month by Private Equity International said PAG was offering a tender process on multiple funds, with PAG Asia Capital II worth $3.6 billion being considered as one of the options.
PAG reportedly cut its fundraising target earlier this year for its latest Asian buyout fund from $9 billion to $6 billion. Private equity funds globally are struggling to raise capital amid a weak fundraising environment, but the task has been increasingly challenging for Chinese funds with Western LPs that are juggling the additional risks of geopolitics.
Industry giants such as TPG and Carlyle were also reported to have cut or closed below their fundraising targets. Many institutional investors are treading with caution on their allocations following an environment of interest rate and inflation hikes and fears of a recession.