AI Capital to launch Asian FoF in 2010

The Japanese investment management firm plans to start fundraising for its fifth private equity fund of funds, which will commit to Japan- and Asia-focused funds.

Alternative Investment (AI) Capital, a Tokyo-headquartered private equity fund of funds manager and gatekeeper, plans to start fundraising for AIC Japan III Fund next year.

Though called a Japan fund, the new fund of funds will seek to find a balance between investing in Japanese funds and other Asian funds, where the firm sees some good investment opportunities, Kazushige Kobayashi, president and chief executive officer of AI Capital, told PEO's sister publication PEI Asia in an interview.

Kobayashi said the size of the proposed fund has not been determined. The firm’s previous fund of funds, AIC Japan II Fund, raised Y18.8 billion ($212 million; €143 million). That fund is almost fully committed across 18 funds, Kobayashi said. He added the firm had made commitments to buyout funds in mature markets such as Japan and Australia, besides backing growth capital-focused funds in markets such as China and India.

In 2004, AIC raised $152 million to invest in US and European funds. The firm presently manages two other Japan-focused funds of funds. In all, AI Capital manages assets of about $2.7 billion. This includes capital it manages through its third party funds of funds and assets it manages as a gatekeeper for various Japanese institutions for whom it makes non-discretionary investments.

In February this year, Sumitomo Mitsui Banking Corporation acquired a 20 percent stake in AI Capital for an undisclosed sum from Mitsubishi Corporation, Daido Life Insurance and Mitsubishi UFJ Trust and Banking Corporation, the financial services company’s trust banking arm. The trio now holds stakes of 51 percent, 25 percent and 4 percent respectively in AI Capital.