China fund invests first, raises capital later

SAN FRANCISCO — When Melissa Ma, Laure Wang and Rebecca Xu decided to strike out and form a new fund-of-funds firm focused on private equity in Asia, they opted to invest first and raise a fund second. With a new firm raising a first-time fund, the lack of a track record makes the fund-raising trail tough for even the most experienced executives. So more and more executives are scraping together some funding to create the track record before they ever set foot on the road. Starting off with some seed money from Arthur Rock, a venture capital investor, and F. Warren Hellman, founder of private-equity firm Hellman & Friedman LLC, the three women began investing in funds throughout Asia from their Hong Kong headquarters, Ms. Ma, a former Hellman & Friedman director, said in an interview in her firm’s office here. The firm, Asia Alternatives Management LLC, recently closed its first fund after two years of investing. Investors in the $515 million Asia Alternatives Capital Partners fund include Mr. Rock and Mr. Hellman, as well as the California Institute of Technology, the $247.9 billion California Public Employees’ Retirement System, Massachusetts Mutual Life Insurance Co., the $48 billion Ontario Municipal Employees Retirement System and the $33 billion Pennsylvania State Employees’ Retirement System.