Morgan Creek is looking to enhance its investment capabilities in India with the addition of Anand Prasanna from Squadron, while at the same time embarking on capital-raising for its second Asia-focused private equity fund of funds.
“India’s important to us. We’ve been spending a lot of time there and having Anand onboard [starting next month] will enhance the capability of our coverage in India,” says Jason Zhang, a partner for Morgan Creek who heads the firm’s Asian investment activities out of Shanghai.
The US alternatives fund-of-funds manager, which runs about $7 billion in AUM through a series of hedge fund and private equity products, primarily invests in the region through Morgan Creek Partners Asia, its $240.7 million private equity FoF which closed in 2009.
“Our focus area is primarily China, India and Southeast Asia,” says Zhang, adding that the team covers other markets in the region.
The flagship Asia vehicle is about 90% invested, with a follow-up fund in the works. “We’re starting to raise Fund II and are hoping to have that wrapped up over the next 12 months or so,” says Zhang. It has a target size of $300 million.
Additional investment capital for Asia may come from Morgan Creek Partners V, a global private equity FoF that is currently being raised, with a target of $150 million. There is no set Asian allocation, but in previous funds of the Morgan Creek Partners series, up to 25% has been invested in Asia, notes Zhang.
Morgan Creek has had presence in Asia since 2007, with the establishment of the Shanghai reoperation, which was co-founded by Zhang. The firm also has a smaller office in Singapore.
The team in Asia primarily focuses on Morgan Creek’s private equity investment opportunities in the region, but also extends to the firm’s other areas, including co-investment deals, distressed investments and ‘real assets’ such as real estate, natural resources, energy and commodities.
The Asia team also plays a supporting role in Morgan Creek’s fund-of-hedge-fund investment activities by helping to source and monitor managers, in addition to conducting due diligence, says Zhang.
Morgan Creek's Opportunity Fund and BRIC Plus FoHF vehicles have investments in Asian hedge funds, including Hong Kong-based manager Tybourne Capital and strategies focused on India and China.
Asia accounts for less than 10% of Morgan Creek’s investor base, which is mostly US-based, although the firm would like to see the proportion grow in the long term. “This is something that we would like to put some more effort into,” says Zhang.