Ping An, Adamas JV approaching first close – exclusive

The joint venture will operate under an ESG framework with a focus on the clean tech, education, infrastructure, healthcare and IT/media sectors.

The Adamas Ping An Opportunities Fund, a joint venture between Hong Kong-based private debt fund manager Adamas Asset Management and Chinese insurance subsidiary Ping An Trust, is approaching its first close at between $75 million to $100 million in October this year.

It is targeting a total corpus of $500 million.

The closed-ended credit fund is eyeing on an IRR of 18-20 percent with net 8 percent cash return to all investors per annum. It has a four-year fund life with a two-plus-one year investment period. Ping An will contribute 30 percent of the total assets under management of the fund and it will be jointly managed by Ping An and Adamas. Two to three rounds of fundraising are expected.

“We have a Western mind-set for investor relations, communication and management style while Ping An has a very in-depth network and critical onshore size in China. Ping An is very established in the equity and real estate space but they are still kind of new in this spectrum, therefore this combination allows Adamas to leverage our track record and vehicles to complement that,” explained Marc de Kloe, managing director of Adamas Asset Management.

The fund will provide $30 million to $50 million of senior secured loans to small to medium-sized enterprises under an ESG framework.

“We are now testing running investment meetings and getting transactions lined up. There are some really good deals and you really start to notice how under-financed these companies are. We are positioned to help them to grow significantly by providing debt,” said De Kloe.

“A lot of what we do is ESG compliance; we have done a lot of ESG-compliant deals in the health sector, clean tech sector and we are also working on the reporting and internal training to meet ESG criteria,” he added. “We want to be seen as Western institutional quality and our plan is essentially matching with the Chinese government’s five-year plan.”

Adamas had about $600 million in AUM by the end of March 2016 and runs two private debt funds. Asia Private Credit Fund I has had nine full realisations at a gross IRR of 28 percent and 1.7x gross cash multiple with more than $40 million dividends distributed to date. Its Fund II has also been fully deployed and has funded six deals to date.

Ping An Trust is a subsidiary of the Chinese insurance giant Ping An Group. Ping An Trust’s AUM has reached $86 billion and it made a net profit of $479 million as of December 2015. It has expanded its private equity business through the establishment of a wholly owned subsidiary, Ping An New Capital Investment Co Ltd.

Barry Lau, the co-founder and managing director of Adamas, will be speaking at PDI’s Asia Forum in October this year. []