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Adveq plans RMB fund of funds

The Swiss fund of funds manager has signed an MoU with the government of the Shanghai Pudong New Area.

Zurich-headquartered fund of funds manager Adveq is planning to launch an RMB-denominated fund of funds, according to two industry sources. No details on the timings or target of the fund launch are known.

The firm signed a memorandum of understanding with the government of the Shanghai Pudong New Area over a year ago, Bruno Raschle, chairman and CEO of Adveq, confirmed to sister site PEI Asia, although he declined to comment further.

Foreign firms such as The Blackstone Group, CLSA Asia-Pacific and The Carlyle Group have all recently revealed plans to raise RMB funds, making use of a pilot policy introduced in June to allow foreign private equity and venture capital firms with operations in Pudong New Area to establish wholly-owned local subsidiaries. However, the Shanghai government's agreement with Adveq, which opened an office in Beijing in 2007, seems to predate this initiative.

In a market outlook report released by Adveq last week, Darren Wong, managing director and head of Adveq’s Asian investments, said there were now enough fund managers in China to enable institutional investors to build a portfolio of “high quality” private equity investments. Presently, the report noted, 1,000 private equity fund managers operate in Asia Pacific, of which 300 are active in China. Adveq itself has so far committed to 20 private equity funds in China.

Adveq added Wong to its six-strong investment team in Beijing this March. It is currently in the market for its second Asia-focused fund of funds, which is targeting $350 million. By May 2009, the firm had raised more than $61 million for the fund. Adveq’s debut Asian vehicle closed on more than $200 million in 2007 and is fully committed.