AIG Asian Opportunity Fund II closes short of target

AIG Global Investment Group has missed its fundraising target by $90 million. In spite of unprecedented interest in the region it raised just $410 million for its AIG Asia Opportunity Fund, an expansion stage private equity fund.

In addition to $410 million raised, AIG’s private equity unit in Asia will have access to an additional $410 million from AIG Global Emerging Markets Fund II, a 2005 vintage, and the group’s balance sheet, Ada Tse, AIG’s Global Investment Group’s Asia president and chief executive told PEO.

Specifically, Asia Opportunity Fund II will fund 50 percent of an expansion-stage investment in Asia while AIG Global Emerging Markets Fund will contribute 35 percent and the insurance group will fund the remaining from its balance sheet, Tse explained.

She said she was not concerned the fundraising had fallen short, because it effectively had $820 million to deploy including the Global Emerging fund.

The new fund has already committed approximately 15 percent of its capital in three deals, according to a statement.

In China, AOF II invested in Tiangong International Company, a privately-owned local high-speed specialty steel and steel cutting tools maker. In India, the fund invested in Firepro Systems, a building systems company.

In Korea, AOF II invested $21 million in Alticast, a company that supplies a product that enables cable companies to provide interactive services to its clients, Tse said.

The latest fund, which held an initial close toward the end of 2005, succeed AOF I which has built a portfolio of 23 companies across Asia, of which 12 are fully exited, and a handful, partially realized, according to Tse. The first fund – also the first managed by the group’s Asian private equity team, achieved a 34 percent gross IRR on realized investments.

In addition to private equity, AIG Global Investment Group is also a manager of fixed income, equity, non-performing loans and real estate assets. Globally, it manages more than $670 billion in assets, employing more than 1800 professionals in 44 offices at the end of 2006.