Bloomberg News

Alibaba Success Spurs Billionaires Ozi Amanat to Pre-IPO FundBy Sanat Vallikappen and Klaus Wille September 26, 2014

Billionaire B.K. Modi’s chief investment officer is starting a fund to help wealthy Asian families get allotments before companies go public in the U.S. after placing Alibaba Group Holding Ltd. (BABA:US) with investors.

The fund has raised $10 million in commitments and targets $50 million by January from Asian family offices seeking stakes as small as $5 million before initial public offerings, which banks may not be able to provide, Ozi Amanat, who manages the existing portfolio of businesses for Modi’s Singapore-based Smart Global Holdings Pte, said in an interview yesterday.

Amanat hit on the idea of starting the fund, when more than a month before the Alibaba IPO he got a block of the company’s pre-IPO shares valued at $35 million, and successfully placed a majority with Asian families, he said. Investors who got Amanat’s pre-IPO shares at below $60 apiece, were sitting on returns (BABA:US) of at least 48 percent as of the Sept. 25 closing price of Alibaba in New York. Alibaba raised $25 billion earlier this month in the world’s largest IPO.

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“Access is what I’m providing,” said Amanat, a U.S. citizen who previously worked in New York at investment bank Oppenheimer & Co. (OPY:US) and at a family office, which he declined to name, before moving to Singapore a year-and-a-half ago. “I have connections with the startup ecosystem in the U.S. and with Asian family offices, and I want to bring them together.”

Family Offices Family offices have caught on in Asia as the ranks of wealthy individuals in the region swelled. Asia has about 100 family offices, compared with 24 prior to 2000, according to a report this month from Swiss bank UBS AG (UBSN) and Campden Wealth Ltd. The number of millionaires in the Asia-Pacific region increased 17 percent in 2013 to 4.32 million people, the highest growth rate across any region, Capgemini SA and RBC Wealth Management said in a June 2014 report.

Singapore-based Modi, whose Smart Global has interests in sectors including telecommunications, healthcare and financial services, is willing to commit 10 percent of the capital to the fund, Amanat said. Whether the fund will sit inside Modi’s company or outside will be decided once it is raised, Amanat said. Modi has a net worth of about $2 billion, according to his external spokeswoman Chhavi Leekha in New Delhi.

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Bed-and-breakfast company Airbnb Inc., based in San Francisco; Sunnyvale, California-based Bloom Energy Corp. and Palo Alto, California-based software maker Palantir Technologies Inc. are among a dozen companies Amanat is considering for future pre-IPO placements with family offices.