Partners Group exits Gong Cha investment after Bain buyout of bubble tea brand

PARTNERS Group will exit its private credit investment in Gong cha after Bain Capital bought the Taiwanese bubble-tea brand from TA Associates in August.

The Swiss-based private asset manager said it has entered an agreement to be fully repaid, according to a document seen by Bloomberg. Partners Group in 2019 had provided a financing package of more than US$200 million to support TA Associates’ acquisition of Gong cha and also took a minority equity stake.

The returns on the investment were not disclosed. 

While private credit is growing in Asia-Pacific, the region still makes up only a small portion of the global US$1.8 trillion market.

Its immediate outlook also faces a number of challenges. Economic uncertainty, geopolitical tensions and elevated interest rates are set to slow growth in private credit fundraising in the region as investors become more wary of illiquid assets, Moody’s Ratings said in a report in July.

While exiting its Gong cha position, Partners Group is seeking further investment opportunities in Asia, as its customers look to diversify away from the US, global head of private debt Andrew Bellis said in a recent interview.  

The asset manager has already deployed several billion dollars in Asia across more than 50 private credit investments over the past 15 years, with most of those in the past five to seven years, he said.

“What we’re seeing is more clients looking to make dedicated allocations to Asia private credit,” Bellis said.

Partners Group recently closed a US$1 billion private credit mandate with a major institutional investor in Asia, including a discretionary tranche that it will manage as well as co-investment capital, it announced on Aug 17. The company currently oversees about US$6 billion in private credit assets in the region.

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Partners currently favours high-performing, defensive or less cyclical companies, and is steering away from some of the hottest areas of Asian financing, Bellis said.

Data-centre and GPU financing – which refers to financing to enable companies to acquire advanced technology – is less of a focus, he said, with Partners Group instead targeting “real economy” businesses. Recent investments have included education and corporate services companies. BLOOMBERG