Asia Alternatives closes second FoF on $950m(2)

The San Francisco- and Hong Kong-based firm has closed its second fund $100m higher than its initial target, but slightly shy of the $1bn close anticipated. The fund will focus on fund investments in China, Japan, Korea and India.

Asia Alternatives, a fund of funds manager, has closed its second fund on $950 million, nearly double the size of its predecessor.

The firm said it will invest with top quartile managers diversified across strategy, vintage year and asset class in China, Japan, Korea and India. It will also consider opportunities in Southeast Asia, Australia and New Zealand.

The fund is 25 percent committed, according to Melissa Ma, co-founder and managing director of Asia Alternatives. The fund's investments include MBK Partners II and Hony Fund 2008, which closed in June on $2 billion for investments in China.

“We continue to see a tremendous number of opportunities in the Asian private equity space, especially given the current economic environment,” Ma said in a statement.

Ma told PEO Asian markets have been somewhat protected from the meltdown of global credit markets because many deals in Asia have not contained high levels of leverage. Ma said the financial environment has not caused the firm to change its investment strategy.

“The Asian economy is still strong. We're doing quite well, we have no need at this point to deviate from our strategy,” Ma said.

CP Eaton served as the placement agent for the fund, which had an initial target of $850 million.

The firm said the majority of Fund II’s limited partners are returning investors from Fund I, which closed in May 2007 on $515 million.

Asia Alternatives Capital Partners II’s LPs include the California Institute of Technology, California Public Employees’ Retirement System, New York State Common Retirement Fund, OHIM Asia Investors, an affiliate of Oak Hill Investment Management, Ontario Municipal Employees Retirement System and the Pennsylvania State Employees’ Retirement System. Hellman & Friedman co-founder Warren Hellman and venture capitalist Arthur Rock are also investors.

CalPERS committed $200 million to the fund in August, at which time its meeting minutes said the fund had closed on $1 billion. CalPERS began its relationship with the fund of funds in 2007 with a $125 million commitment.

The Hong Kong-based firm was founded in 2006 by Ma, who is a former Hellman & Friedman director; former Pacific Venture Partners director Laure Wang and Rebecca Xu, former senior Asia investment officer at International Finance Corporation.