The new vehicle Asia Alternatives Capital Partners V (AACP V) will focus on Greater China, Japan, South Korea, India, Southeast Asia and Australia, similar to its predecessor funds.
Asia Alternatives is the latest to join the growing list of private equity firms that have or are looking to raise mega Asia-focused funds. Affinity Equity Partners, a Hong Kong-based pan-Asian manager, is reportedly seeking to raise $5 billion for its fifth fund.
New York-based Morgan Stanley is in talks to raise $2 billion for a new PE vehicle dedicated to the region, while All Stars Investment will also set up an $800 million technology fund targeted at later-stage Chinese companies. KKR & Co recently closed its Asian Fund III at a record size of $9.3 billion, while TPG is also raising $4.5 billion for its seventh Asia Fund.
The firm has already collected $1.35 billion from more than 160 investors since the fundraising began last June, the news report said. Eaton Partners serves as the placement agent for the fund.
The LPs in Fund V include the San Francisco Employees Retirement System (a contribution of $50 million) and Pennsylvania State Employees’ Retirement System ($50 million) and MSBI, which is set to commit $100 million to Fund V, the report said.
Up to 85 per cent of the fund will be allocated to primaries, while up to 30 per cent is earmarked for direct co-investments and secondary purchases of fund commitments.
Asia Alternatives plans to use around 40 per cent of the fresh capital to invest in expansion and growth capital, 30-40 per cent in domestic small to mid-market buyout opportunities, 15-20 per cent in venture investments, and 10-20 per cent in special situations funds.
The firm is also mulling to invest in 20 managers, 60 per cent of them being existing partners. It has backed China-focused CDH Investments and Hosen Capital, Singapore-based Northstar Group, Indian manager ChrysCapital, and North Asia-focused buyout firm MBK Partners.
Asia Alternatives in April 2015 collected $1.8 billion via AACP IV and its related vehicles. Its AACP III closed in July 2012 with a total of $908 million in committed capital.
Headquartered in San Francisco, the firm has approximately $9 billion in regulatory management. It invests with top performing private equity fund managers across Asia primarily in Greater China (Mainland China, Taiwan, and Hong Kong), Japan, Korea, South East Asia, India and Australia and is diversified across buyout, growth and expansion, venture capital and special situations funds.