Asia Alternatives raises $515m for maiden fund of funds

Asia Alternatives has raised $515 million at the final close of a maiden fund of funds that has been invested in a number of high profile general partnerships that include China’s CDH and MBK Partners.

Strong backing, plus the combined professional experience of the three co-founders, attracted more than 25 institutional investors to commit to the fund which had a $350 million target and a $450 million hard cap.

The limited partners were supportive of Asia Alternatives exceeding its hard cap because the proportion of their commitment and the consequent investments in general partners will not substantially change from the initially proposed model, Melissa Ma, co-founder and managing director explained.

“The fund size was (ultimately) based on what we can invest and not what we can raise.”

The new local fund-of-funds manager garnered at an early stage the support of high-profile founding investors and limited partners: F. Warren Hellman, co-founder of Hellman and Friedman, Arthur Rock, a well-known Silicon Valley venture capitalist and OHIM Asia Investors, an affiliate of Oak Hill Investment Management, Ma told PEO.

More than sixty percent of the LP commitments were US-based, Ma said, naming California Public Employees’ Retirement System (CalPERS), Pennsylvania State Employees’ Retirement System, California Institute of Technology and Comprehensive Financial Management, a LP of Singapore-based Axiom Asia, a rival fund-of-funds manager.

Axiom and Asia Alternatives, both of which represent the first local independent Asia-focused fund-of-fund managers, were fundraising over the same period.

Joncarlo Mark of CalPERS said: “The principals of Asia Alternatives are very in tune with the local markets and provide CalPERS with additional insight into the ever changing investment landscape in the region.”

Other investors include Massachusetts Mutual Life Insurance Company and the group’s Asian affiliates MassMutual Asia and MassMutual Japan as well as Canada’s Omers Capital Partners.

Asia Alternatives Capital Partners will invest in buyout, growth capital, venture capital and distressed debt funds focused across Asia. To date, the fund-of-funds has invested in over 10 funds that invest in more than twelve countries.

Capital Today, Hony Capital, SAIF Partners, Clearwater Capital, Nexus Capital and NEA Indo-US are among the managers Asia Alternatives has invested in. 

Asia Alternatives formally launched its fundraising in June of 2006, and held a first close in September on approximately $100 million.

Founded by Rebecca Xu and Laure Wang and Melissa Ma, Asia Alternatives has become a familiar entity well ahead of the final close of its maiden fund.

Ma was working for Hellman & Friedman prior to co-founding Asia Alternatives. Xu was working at International Finance Corporation where she had been a founding member of the private equity and investment funds program. Wang was a general partner at Pacific Venture Partners, a pan-Asian venture capital firm, and before that, Goldman Sachs.

In addition to a Hong Kong base, Asia Alternatives has offices in Beijing and San Francisco.

C.P. Eaton acted as the placement agent for Asia Alternatives and Pillsbury Winthrop Shaw Pittman was the legal counsel.