Strong response to new PE fund of funds by Azalea

Singapore

AZALEA Investment Management of the Temasek Group has raised US$650 million for its inaugural fund of funds product, surpassing its target of US$400 million.

The Altrium Private Equity Fund invests in primary and secondary PE funds in Europe, US and Asia, focusing on buyout and growth strategies.

Investors in Altrium include endowments, foundations, family offices and high net worth individuals.

Margaret Lui, Azalea chief executive, said Altrium represents Azalea's commitment to expand its PE product offerings to a wider investor base, including accredited investors. "We are heartened by the strong interest in Altrium, and humbled by the trust from investors in Azalea . . .

"Altrium is a differentiated fund of funds equity product that allows investors to access a portfolio of high quality PE funds. The strong demand is a reflection of the unique product features and the growing sophistication of investors in understanding this asset class."

Chue En Yaw, Azalea managing director & head of PE funds, said Altrium was to be accessible to eligible investors, with the minimum commitment set at US$200,000. "We have also included a well-defined exit mechanism in Altrium which is designed to offer investors a shorter investment tenure than a typical PE fund of funds, thus overcoming another traditional deterrent of investing in PE funds. We hope to launch Altrium on a regular basis to help investors build a diversified portfolio across different asset classes.''

To date Azalea has sought to make PE accessible to retail investors by structuring a portfolio of PE funds into a bond. So far there have been two PE-backed bond issuances with tranches set aside for retail investors under the Astrea platform. Astrea IV and V were strongly subscribed at launch, and were structured with risk mitigating features, such as safeguards to ensure that the coupon and principal are paid as scheduled.