Hong Kong-based private equity firm Asia Alternatives is seeking to raise $1.3 billion for its sixth fund-of-funds to invest in 20-25 managers, according to a board meeting document from a limited partner (LP).
The new vehicle, Asia Alternative Capital Partners VI (AACP VI) will invest in Greater China (45-55% of the fund), Japan and South Korea (20-40%), India (15-25%), and Southeast Asia and Australia (10-15%), shows the document from the Minnesota State Board of Investment.
AACP VI will invest in buyout, growth and expansion, venture capital and special situations funds.
Over 90% of the capital will be invested in Asia-based fund managers, with the remainder to be allocated to US or European PE firms.
Furthermore, AACP VI will earmark 20-30% of the fund for co-investments and secondary purchases of fund investments to enhance returns, Minnesota SBI said. These investments will primarily be in existing managers.
The investment period of the sixth vehicle will be five years from the close of the fund.
Minnesota SBI has approved to invest $100 million in MN Asia Investors, a separately managed account with Asia Alternatives.
The impetus for the new commitment came from “a number of attractive opportunities” the US pension fund was able to participate in after its commitment to AACP VI last year.
In Q3 2020, Minnesota SBI approved a commitment to invest $200 million across two pools of capital, a balanced pool that will be invested in parallel with AACP VI, and a co-investment pool to substantially make similar investments as AACP VI.
The MN Asia Investors commitment will enable more co-investment opportunities in the 2021-22 period, the $129 billion pension scheme added.
Minnesota SBI had invested $100 million in AACP V, which raised a total of $1.52 billion.
Asia Alternatives had raised around $3.3 billion for its previous four funds, which generated 11-17.6% IRR.
Founded in 2006, Asia Alternatives has invested in Asia-based funds such as MBK Partners III, Hosen Investment Fund III, and GenBridge Capital Fund I.