Manulife IM will ‘absolutely’ consider GP stake in Asian PE firm

Manulife Investment Management, the asset management arm of Canada’s largest insurer, has just bought a stake in an Asian infrastructure fund manager and will consider doing the same thing with a private equity firm in the region.

The C$900 billion institution ($684 billion; €579 billion) has acquired a significant minority stake in Albamen Capital Partners, a newly formed Chinese renewable energy and digital infrastructure manager, with the option to take majority ownership in future, according to an 11 November statement.

Manulife IM will “absolutely” consider doing the same with an Asian private equity or private credit business as it seeks to build its regional presence, Myron Zhu, head of Asia private markets, told Private Equity International. Asia-Pacific accounts for around 5 percent of Manulife IM’s $100 billion of private markets AUM.

“This is the first building block for Manulife’s private markets Asia business and to a certain extent this laid out like a blueprint for the type of things I’m going to do in Asia,” Zhu said.

“For other strategies, I would say we are very much looking at the overall pan-Asia set up if we can, but obviously some of the China managers coming out stand out to be very strong and highly differentiated. We’d be happy to repeat what we did for Albamen.”

Zhu joined the Hong Kong office in 2019 from Aberdeen Standard Investments, where he was co-head of Asia-Pacific private equity, and is responsible for building a third-party offering for Manulife’s existing private equity, private credit and real estate teams. Manulife closed its debut fund of funds, Manulife Private Equity Partners, in January on $1.5 billion and raised $2 billion for its first third-party infrastructure fund in 2018, as reported by sister title Infrastructure Investor.

“For the other potential partnerships, it depends on what the preference of the team [is],” Zhu said.

“I would envision most likely it will be a self-contained strategy, at least at the beginning. However, over the years if we ever exercise our right to bring the team in-house or we take control … it’s highly likely, we would look for a way to build a synergy across all these investment teams, both from a deal cross-referring perspective, but more importantly I think I want to centralise the middle and the back office from a risk management, compliance, reporting standards, etc.”

Hong Kong-headquartered Albamen is led by the former management team of Jida Capital, a Shenzhen-based infrastructure firm managing the $525 million CGN Capital Partners Infrastructure Fund III, a 2015 joint venture with the private equity arm of China General Nuclear Power. Jida is winding down and will not raise additional funds, per a November statement.

The new entity, which is understood to own the rights to Jida’s investment track record and intellectual property, is expected to launch a fund next year after securing the necessary regulatory approvals in China. It appointed Conrad Yan, the former vice-chairman of Campbell Lutyens in Asia, as co-managing partner in October.

“We have such a strong conviction, obviously, we will seed $100 million for the upcoming [Albamen] fund and we’ve even earmarked additional, significant capital for their next fund if they ever come to market again,” Zhu said. “This would be pure Manulife money; we want to align our own capital as [having] the same interest with potential prospective investors if we come to the market.”