Probitas Partners, a San Francisco-based alternative investment firm, has opened an office in Hong Kong to extend several activities to the region. These include placing third-party alternative strategies with investors, as well as facilitating transactions in the secondary market for private equity and real estate.
Edwin Chan has been hired as associate director to head the Hong Kong office. He was previously associate director for business development at AIG Investments in Hong Kong, a role he held for three years. His main function was to place AIG alternative products with regional investors, in areas such as private equity, real estate and hedge funds of funds.
Probitas was founded in 2001 by partners from Credit Suisse and DLJ. Not only does it serve as a placement agent for third-party providers of alternative investments, but its partners co-invest with their personal wealth in every fund they represent.
Chan says the next two years should be good times for limited partners (LPs) to enter the market, noting there is growing appetite in Europe and America for Asian alternative investment strategies, as well as a growing need to provide Asian limited partners with service grounded in their time zone, as opposed to taking care of them from San Francisco.
Chan will be scouting the region for general partners to represent to international investors, and says the firm is still studying the optimal strategies. These are likely to include growth strategies run by teams with a track record or a history of investing together, particularly in the middle market (funds up to $1 billion).
He is also in discussions with potential investors, regional and international, about opportunities in Asian secondary private equity, as well as with investors and corporations in the region that may be looking to sell their portfolios. Although not yet a big trend, it could turn into one: "We could see more activity," Chan says. Probitas has performed over $35 billion in secondary advisory.
Once the firm is better established in the region, it may also seek to provide advisory services along the lines it offers to LPs in the US. For example, it provides advice to Calpers on private-equity strategy.
Chan reports to the partners in San Francisco, one of whom, Greg Hausler, says the new office will help provide research, advice, fund offerings and liquidity management to Asia-based LPs. "Savvy and long-term investors will see rewarding opportunities in the next 12 to 18 months," he says.