Private equity fund of funds Asia Alternatives raises over $1.5B

Some of the fund managers that Asia Alternatives has backed in India include CX Partners, ChrysCapital and Tano Capital.

Asia Alternatives Management LLC, one of the largest independent Asian private equity fund of funds, announced that it had closed its new funds with over $1.5 billion in investor commitment.

Asia Alternatives Capital Partners III (AACP III), an LP fund with a target of $800 million, closed at $908 million, succeeding AACP II, which closed in September 2008, and AACP I, which closed in May 2007. Other new fund vehicles totalled approximately $600 million, taking the total new fund commitments to more than $1.5 billion.

Founded in 2006, Asia Alternatives invests in Greater China, Japan, Korea, South-east Asia, India and Australia, and across buyout, growth, venture capital and special situations funds. Since its inception, the firm has invested in 36 managers across Asia. Some of the fund managers that Asia Alternatives has backed in India include CX Partners, ChrysCapital and Tano Capital.

Almost 75 per cent of the investors in AACP III also invested in AACP I and AACP II and they mostly include state and corporate pension funds, foundations, university endowments, insurance companies and family offices in the US, Canada, Europe and Asia. Institutional investors include Cathay Life Insurance Co. Ltd, the Church Pension, Comprehensive Financial Management, Massachusetts Mutual Life Insurance Company, New Mexico State Investment Council, New York State Common Retirement Fund, OHIM Asia Investors, LP, an affiliate of Oak Hill Investment Management and Pennsylvania State Employees' Retirement System.

"The financial crisis and global market uncertainty have made it tougher for investors to decide where best to allocate their money and we could not be more pleased with the overwhelmingly positive response we received," said Melissa Ma, co-founder and managing director of Asia Alternatives.

"Asian private equity opportunities represent yet another way, so that investors can achieve strong risk-adjusted returns and portfolio diversification," added Ma.

"Increasing our exposure to Asia is important to the fund's portfolio diversification strategy," said New York State comptroller Thomas P. DiNapoli, a trustee of New York's $150 billion Common Retirement Fund.

George Phipps, managing partner of Oak Hill Investment Management and a returning LP, said, "We've invested with Asia Alternatives since its first fund because of the strong local reputation and the ability to identify and gain access to attractive investments."

Asia Alternatives is one of the first independently formed Asian private equity fund of funds. The firm is also the first LP to receive a QFLP (Qualified Foreign Limited Partner) licence in China, which allows Asia Alternatives to invest in selected, qualified RMB-denominated private equity investments.

Eaton Partners, LLC, acted as exclusive placement agent for Asia Alternatives and Pillsbury Winthrop Shaw Pittman LLP served as legal counsel.

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(Edited by Sanghamitra Mandal)