Clearwater closes third Asia fund on $900m(3)

The New York-based firm’s latest fund closed on nearly twice its initial target.

New York-based, Asia-focused Clearwater Capital Partners has held a final close on $900 million (€655 million) for its third fund. The fund’s close significantly exceeded its initial target of $500 million, with an $850 million cap.

The fund’s limited partners include state and corporate pension funds – including the California Public Employees Retirement System – fund of funds, endowments, foundations, insurance companies and family offices in the US, Asia and Australia.

“The extremely robust investor interest we witnessed in the fundraising for Fund III is evidence that others share our enthusiasm for the region and the asset class,” said Robert Petty, co-founder and managing partner, in a statement.

Petty and Amit Gupta founded Clearwater in 2001. Both men had previously worked at Amroc Investments and had gained experience in distressed debt and special situations during the Asian financial crisis of 1998.

Clearwater’s mandate includes special situation investments in public and private debt or equity of local issuers across Asia, excluding Japan. In its most recent high profile deal, Clearwater was part of a consortium including London’s Ashmore Investment Management and Spinnaker Capital that bought out Asia Netcom, a Hong Kong-based regional telecoms service provider, from China Netcom Group for $402 million in August of 2006.

The firm’s previous fund was a collateralised loan obligation that issued notes of $146 million. It was the first rated CLO of Asian ex-Japan distressed debt.

The firm has locally staffed offices in New York, Hong Kong, Mumbai, Seoul and Singapore, and this year opened an office in Beijing. Clearwater has $1.7 billion in assets under management.