Asia Alternatives nears Fund III close

Recent fund presentation documents indicate the firm is close to reaching the $800m target for its third fund of funds.

A $75 million commitment from the New Mexico State Investment Council will likely put Asia Alternatives Management within striking distance of the $800 million target on its third fund of funds. 

Prior to New Mexico’s commitment, the firm had secured at least $700 million for the Asia-focused vehicle, according to fund presentation documents made available by the New Mexico endowment. 

The firm could not be reached for comment at press time. 

The $15 billion endowment is splitting its commitment to the third fund; allocating $50 million to the fund’s traditional capital structure and $25 million to a dedicated co-investment vehicle, according to documents. New Mexico SIC will hold veto rights for certain co-investments, though the extent of those rights has to be determined, according to a spokesperson for the endowment. 

“The concept behind the co-investment pool is to provide investors with the ability to tailor their exposure to different countries, fund sizes and/or types by committing additional amounts to funds identified by Asia Alternatives,” according to a recommendation document from LP Capital Advisors. 

The combined approach will give the $15 billion endowment the opportunity to invest directly in Asian fund managers who they may not have had access to beforehand, the document said. 

Presentation documents indicate that the firm also offered co-investment vehicles for its second fund of funds, a $950 million vehicle raised in 2008. 

The California Public Employees’ Retirement System lists Capital Partners II twice in its private equity portfolio; one entry, for a $150 million commitment, indicated the fund had generated 32.2 percent net internal rate of return and a 1.5x investment multiple as of 30 September. A second $50 million commitment had generated 1.1x multiple and 7 percent net IRR.

It is unclear if CalPERS participated in the co-investment programme. A spokesperson for the retirement system could not be reached for comment.  

Asia Alternatives’ third fund of funds will target investments throughout the continent, primarily focusing on China, Japan Korea and India. The firm will also explore opportunities in Southeast Asia, Australia and New Zealand, and plans to invest in buyout, growth, venture and special situations funds, according to documents. 

Asia Alternatives was founded in 2006 by Melissa Ma of Hellman & Friedman, Laure Wang of Pacific Venture Partners and Rebecca Xu of the International Finance Corporation. The firm maintains offices in San Francisco, Beijing and Hong Kong.