In 2011, Preqin’s Funds in Market database has tracked the successful closing of eight funds of funds that have a predominant focus on Asia Pacific. From this, an aggregate USD 1.16 billion was raised. The first Asia Pacific-focused fund of funds that closed this year was Axiom Asia III. The vehicle, raised by Singapore-based GP Axiom Asia Private Equity, garnered over USD 1.15 billion at its final close in February, making it the second biggest Asia Pacific-focused fund of funds vehicle raised in history. Axiom Asia III will focus solely on the Asia Pacific region, namely Greater China, India, Japan, Southeast Asia and Australia. It will target buyout and venture funds with no specific industry focus. It may also make selective secondary and co-investments. The fund of funds has a typical investment size of USD 30 million to USD 60 million, but may commit up to USD 100 million in exceptional circumstances.
To date, the largest Asia Pacific-focused fund of funds ever raised is Technopreneurship Investment Fund, with a capital of USD 1.3 billion and a vintage in 1999. The vehicle was managed by TIF Ventures, a wholly-owned subsidiary of Economic Development Board (EDB) of Singapore. Formed under the initiative of Technopreneurship 21 Concept Plan, the fund of funds targeted mainly venture funds focused on Singapore-based companies. It aimed to boost the growth of entrepreneurial firms in technology-related sectors. However, as of 2009, TIF Ventures ceased its operations.
Preqin’s Funds in Market database is currently tracking 32 funds of funds with a predominant focus on Asia Pacific. These vehicles aim to garner more than USD 7 billion in aggregate capital.
On this list, the largest vehicle is Guochuang Kaiyuan Fund of Funds, which has a target final close in H1 2012. It is targeting over CNY 15 billion (USD 2.38 billion), and if successful, it can potentially be the largest Asia Pacific-focused fund of funds in history. The fund of funds is part of a joint venture between China Development Bank (CDB) and Suzhou Ventures Group. The initiative aims to provide capital to China-based GPs and is split into two portions – one focused on venture funds and the other on buyout funds. Guochuang Kaiyuan Fund of Funds targets the buyout portion and is being managed by CDB Capital. It is the first vehicle in a series that has a total targeted value of CNY 60 billion (approximately USD 9.52 billion). While the capital will be invested mainly in China, it may commit selectively to offshore funds that can further the overseas expansion of Chinese enterprises.
The venture portion of this initiative is being managed by China-based Suzhou Ventures Group, under GC Oriza Fund of Funds. With a targeted value of CNY 5 billion (USD 793 million), it ranks as the second largest Asia Pacific-focused fund of funds vehicle currently on the road. Similarly, the vehicle is China-focused and aims to invest in 20 to 30 venture funds in its lifetime, with a typical investment size of CNY 100 million to CNY 300 million (USD 15-50 million).
With a targeted value of USD 750 million, JPMorgan Asia Private Equity Fund is the third largest fund of funds vehicle focused on Asia Pacific currently raising in market. Managed by US-headquartered JPMorgan Asset Management, the vehicle seeks investment opportunities in Asia, with a primary focus on Greater China, including China, Taiwan and Hong Kong. It may also invest opportunistically in other parts of Asia such as India, Japan, South Korea and Australia. The fund of funds can invest up to 25% of committed capital in secondary, direct or co-investment opportunities.