Singapore's Azalea raises second fund-of-funds

Altrium Private Equity Fund II received commitments from pension funds, foundations, insurers, family offices, and high net worth individuals (HNWIs). It comes two years after Azalea raised USD 650m for its debut fund-of-funds, which was also the asset manager’s first product offering direct equity exposure to the asset class.

From the outset, Azalea’s remit has been to break down barriers to participation in private markets, to the point of including retail investors. Accredited HNWI investors accounted for half of Altrium Fund I, with Azalea marketing the product to them through a private bank. Institutional investors contributed the rest.

The vehicle was also structured to appeal to the mass affluent: the entry-level equity check was set relatively low at USD 200,000; efforts were made to ameliorate the j-curve effect by offering a blend of primary and secondary exposure; and the fund life was shorter than the 15-year span commonly seen in the fund-of-funds space.

Fund II will follow a similar mandate to its predecessor, constructing a diversified portfolio of private equity fund interests across the US, Europe, and Asia, according to a statement. Despite having a global remit, Fund I was intended to be primarily allocated to US and Europe-based managers.

“PE is traditionally difficult for individuals to access. Through Altrium, accredited investors are able to co-invest with Azalea and enjoy privileged access to strong performing PE fund managers globally,” said En Yaw Chue, CIO of Azalea.

“Investors were also attracted by Altrium’s unique investor-friendly product features, including low minimum commitment, shorter investment tenure and ensuring efficient capital management for investors. We will continue to innovate and launch more PE products that cater to different investors’ preferences.”

Temasek started offering exposure to its private equity portfolio in 2006 with Azalea assuming responsibility in 2016. Gradually, the target audience has broadened from institutions to HNWIs to mainstream retail investors. The Astrea series is now in its sixth iteration, each one essentially a structured secondary transaction involving funds in the Temasek portfolio.

The sixth iteration – a collateralized fund obligation (CFO) worth USD 643m – closed in March 2021. It is underpinned by positions in 35 funds with a net asset value of USD 1.45bn.

Azalea retained a majority stake in each position and packaged the remainder into three tranches of bonds. Two tranches went to institutional and accredited investors and the third was split between institutional and retail investors.

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• Topics
• Southeast Asia
• Fund-of-funds
• Fundraising
• LPs
• Singapore
• Azalea Asset Management
• Temasek Holdings
• HNWIs