July 7, 2014 / 7:45 AM / 4 years ago

Morgan Stanley private equity arm raises $1.7 bln Asia fund

HONG KONG, July 7 (Reuters) - Morgan Stanley said on Monday that its Asia private equity unit has raised $1.7 billion in its fourth Asia fund as it seeks investment opportunities in China and South Korea.

The fund, Morgan Stanley Private Equity Asia IV LP, has already made two investments from the new fund, and raised more capital than initially targeted, the Wall Street bank said in a statement.

One of the key focus areas for Fund IV will be China.

“The last two years in China, we have seen the most attractive entry prices we have seen in the last 10 years,” said Chin Chou, CEO of Morgan Stanley Private Equity Asia (MSPEA).

Morgan Stanley’s fund-raising comes as many banks spin off their private equity arms due to the Volcker rule.

The post-2008 crisis regulation restricts U.S. banks from trading on their own accounts and caps their ‘ investments in risky businesses such as hedge funds and private equity to just 3 percent of Tier I regulatory capital.

MSPEA has invested around $2.5 billion in more than 50 investments in the region in the past 20 years. (Reporting by Stephen Aldred; Editing by Denny Thomas and Ryan Woo)

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