Update: Adamas nears China JV fund closing – exclusive

Adamas Asset Management (Adamas), a Hong Kong-based private credit manager, is set to close Ping An Opportunities Fund, three senior professionals from the firm told Private Debt Investor.

The firm established a joint venture (JV) with Ping An Insurance, a Shenzhen- headquartered insurance firm, in 2015, to raise a commingled fund targeting $500 million from institutional investors.

“The size of Ping An’s commitment to the Adamas Ping An Opportunities Fund is significant,” said Barry Lau, chief investment officer of Adamas.

Ping An Opportunities Fund is raising its first third-party capital. The fund has been established by the JV between Adamas and Yun Sheng Capital Company, a wholly owned subsidiary of Ping An Group, which acts as Ping An’s offshore investment holding company.

It is understood that the insurance group has committed 30 percent of the target fund size, acting as an anchor investor to the vehicle.

“Once 75 percent of the capital is deployed, the parties may look to initiate a follow-on fund,” a senior investment officer from Adamas said. The final closing of the fund is expected to be held by mid-July.

The name of the JV is Adamas Ping An Co-management Limited. It is a Cayman domiciled vehicle and has an ownership structure of 50:50 between Adamas and Yun Sheng Capital Company, according to the sources.

The fund has a four-year life with a target return of eight to 12 percent on an unlevered cash-on-cash basis, according to the sources. The firm is also seeking additional returns generated from a combination of equity, options, and redemption premiums.

On 4 May, the firm announced its first investment from the fund, investing $15 million in convertible bonds.

Speaking to the two senior professionals at the firm about the reason why it took so long to raise the fund and start deploying capital they explained that the insurance firm is a large entity with assets over $1 trillion, and the decision-making process was prolonged.

The firm’s typical credit investment period ranges from two to three years. “We prefer to utilise a self-amortising structure,” a source from the firm added.