Morgan Stanley Alternative Investment Partners (MSAIP), the fund of funds (FoF) of global asset management firm Morgan Stanley Investment Management (MSIM), has raised $585 million for Global Secondary Opportunities Fund LP (GSOF). The fund close exceeded MSIM’s initial target of $500 million, said a company statement.
It follows AIP’s previous close of two other FoFs for the last 13 months. It raised $1.14 billion in commitments for Morgan Stanley Private Markets Fund IV in April last year, and $370 million for Morgan Stanley AIP Phoenix Global Real Estate Secondaries 2009 LP in March 2010.
Besides existing investors, MSIM got some new investors in the fund including endowments, foundations, public and corporate pension plans, family offices, insurance companies, and sovereign wealth funds, added the statement.
GSOF is a fund dedicated to acquiring interests in private equity funds in the secondary market. It targets off-market secondary opportunities with an emphasis on small and mid-cap buyouts, distressed and special situations funds. The fund is planning to diversify its focus and portfolio targets in going forward.
Gregory Fleming, president, MSIM, said, in the statement, “As an integrated platform participating in both the primary and secondary markets, AIP is well-positioned to employ its differentiated investment approach to take advantage of the expected growth in secondary opportunities.”
John Wolak, head of secondary investing, AIP and lead portfolio manager, GSOF, said, “We think the market for secondaries is poised for substantial growth in 2010. MSIM has been an active buyer of secondary interests through AIP’s global core private equity fund of funds program, and through our dedicated fund, we will continue to focus on small-to mid-sized managers and the less efficient parts of the private equity universe.”
As of March 31, 2010, AIP has $17 billion of assets under management. It manages portfolios of hedge funds, private equity funds and real estate funds, and has offices in Pennsylvania, New York, San Francisco, Atlanta, London and Hong Kong.
Besides investing in private equity funds, Morgan Stanley also makes equity investments in companies simultaneously. It runs three Asia focused funds under Morgan Stanley Private Equity Asia Fund series and a real estate focused fund, and targets investments in utilities, integrated telecommunication, real estate and specialized finance. Some of the fund’s investments in India include Asian Genco, Biotor Industries, Tower Vision, and Mantri Developers.