Aquitaine Investment Advisors is offering a new fund that takes private-equity stakes in Asian-based alternative fund managers. The launch coincides with the Hong Kong-based firm's 10th anniversary.
The $200 million-targeted Crescent Fund, based in the Cayman Islands, is being selectively marketed to endowments and foundations in the United States as well as Asian family offices.
This is the fifth of Aquitaine's private-equity products but the first to go with a branded name (as opposed to being named after the firm). The idea is to symbolically mark the start of a new cycle, like a phase of the moon, says Marlene Wittman, group managing director.
The fund is a departure in terms of its objectives. Aquitaine, founded in November 1999, was an early PE investor in China, with two funds, now fully invested or closed. It has a PE fund for Japan, and one based on demographic themes that invested in companies benefiting from Asia's aging societies and shift to consumerism; both of these are fully invested.
The Crescent fund will take majority stakes in Asia-based alternative fund managers. Wittman explains Aquitaine is often being asked by its US clients for the names of good Asian fund managers. "I decided to turn this into a product," she says. "Fortunately the managers we've recommended have been steady."
She says there is a pipeline of such managers to cover most of 2010, based on longstanding relationships with Aquitaine. Wittman recalls how when Aquitaine got its start there were but a handful of Asia-based hedge funds; now there are hundreds.
"Many of these managers have not grown very fast, because of stiff competition as well as redemptions. The inflows always go to the big, visible players." Industry databases don't include a lot of smaller, good managers, she adds.
Aquitaine will act as a general partner, putting in its own money alongside its LPs. It will not only source Asian hedge funds but also help them with capital introductions, streamline their back offices and infrastructure, and help out with documentation. Ultimately it will help these managers develop under the Crescent brand. It will consider teams located as far west as India, provided it can monitor them effectively.
Crescent's legal advisor is Simpson Thacher Bartlett, its fund administrator is Alter Domus and its risk-management platform is from QRMO.
Aquitaine is licensed by the Hong Kong Securities and Futures Commission, and its primary mission has been to source alternative investments for US-based institutional investors.
Its two principals are Wittman and managing director Arthur Yama. Dean LeBaron, founder of Asian-equity boutique Batterymarch Financial Management in 1969 and a recognised emerging-markets guru in the US, has served as a mentor to Aquitaine.