Hong Kong firm raises $515M for Asian FoF

Hong Kong-based Asia Alternatives last week announced that it raised $515 million for its inaugural fund-of-funds, after raising its investment target by nearly 50% during the past year.

Co-founder and Managing Director Melissa Ma cited the firm’s ability to carve out stakes in oversubscribed funds—such as the sought-after $1.1 billion third fund of SAIF Partners, which that closed in April—as a key draw for investors.

Asia Alternatives began investing capital from a few early backers last year. In addition to SAIF, Asia Alternatives’ portfolio includes NEA IndoUS Ventures, an India-focused venture fund announced by New Enterprise Associates in February. The fund-of-funds also has stakes in Clearwater Capital Partners’ distressed debt fund, CDH China Growth Capital Fund and Advantage Partners, a Tokyo-based buyout and private equity investor.

Institutional investors in Asia Alternatives include the California Institute of Technology, California Public Employees’ Retirement System, Comprehensive Financial Management, Mass Mutual Asia, Mass Mutual Japan, Massachusetts Mutual Life Insurance Co., OHIM Asia Investors (an affiliate of Oak Hill Investment Management), Ontario Municipal Employees Retirement System, and the Pennsylvania State Employees’ Retirement System. Individual investors include F. Warren Hellman, founder of Hellman & Friedman, and venture capitalist Arthur Rock.

The firm, which has already invested in about 10 funds in 12 Asian countries, focuses on China, Japan, Korea and India. The firm invests in venture, growth and buyout asset classes.

Ma says that going forward the bulk of her firm’s investments will remain focused on Northern Asian countries and India, but directors will consider funds targeting other parts of Southeast Asia and possibly Australia and New Zealand. She plans for the fund-of-fund to have about 20 total investments in its portfolio.

Ma, a former director at San Francisco-based private equity firm Hellman & Friedman, co-founded Asia Alternatives in 2005 with Laure Wang, a former general partner at Asia-focused VC fund Pacific Venture Partners, and Rebecca Xu, who served previously as investment officer with the International Finance Corp., the private sector investment arm of the World Bank.

Today, Ma says, Asia Alternatives is one of few independent funds-of-funds focused on the Far East. But she expects the asset class to grow as “it is still a very new segment of the market,” with only about a two-year track record.