Orchid Asia closes fourth China fund
The private equity firm has $420 million in equity commitments from investors in Asia, Europe, the US and the Middle East.
Orchid Asia Group Management, a Hong Kong-based private equity firm, has announced the final close of its fourth fund, Orchid Asia IV, with $420 million in equity commitments, which exceeds the fundÆs initial target of $350 million.
The fund û which will invest in China -- has capital commitments from investors in Asia, Europe, the US and the Middle East. Investors include private banks, university endowments, insurance companies, investment institutions, strategic individual capitalist and high-net-worth family offices.
With offices in Hong Kong, Shanghai, Beijing, Guangzhou and San Francisco, Orchid Asia has been investing in China for over 16 years and is one of the first international private equity investors in the mainland. Orchid Asia led the first round investment for Ctrip.com International, a leading travel service provider specialising in discounted air ticket and hotel reservation in China, which returned over 20 times the initial investment; and invested in the first round of Eachnet, the largest online auction company in China, which was subsequently sold to eBay for around five times return.
Orchid AsiaÆs investment strategy is to focus on looking for companies that are managed by experienced operating executives rather than buying cheap assets.
"We are very proud of the high quality CEOs in our portfolio companies,ö says Orchid Asia managing director Gabriel Li. ôThey have excellent operating experience from domestic and international companies such as Oracle, Procter & Gamble, Huawei and ZTE; and based on our investment experience in China, the major reason why an investment does poorly has much to do with management.ö
Orchid Asia invests in expanding domestic enterprises with high barriers to entry and good growth prospects in the consumer services and products sector, as well as the outsourced manufacturing and services sector. It looks for companies with significant competitive advantages in their industries, which are sustainable for the foreseeable future. The source of such advantages could be something as direct as a government license or patent; or something less apparent such as a name brand, a uniquely low cost structure resulting from high market share, extensive distribution channels, advanced and proprietary technologies and processes or a unique source of natural resources.
The fund û which will invest in China -- has capital commitments from investors in Asia, Europe, the US and the Middle East. Investors include private banks, university endowments, insurance companies, investment institutions, strategic individual capitalist and high-net-worth family offices.
With offices in Hong Kong, Shanghai, Beijing, Guangzhou and San Francisco, Orchid Asia has been investing in China for over 16 years and is one of the first international private equity investors in the mainland. Orchid Asia led the first round investment for Ctrip.com International, a leading travel service provider specialising in discounted air ticket and hotel reservation in China, which returned over 20 times the initial investment; and invested in the first round of Eachnet, the largest online auction company in China, which was subsequently sold to eBay for around five times return.
Orchid AsiaÆs investment strategy is to focus on looking for companies that are managed by experienced operating executives rather than buying cheap assets.
"We are very proud of the high quality CEOs in our portfolio companies,ö says Orchid Asia managing director Gabriel Li. ôThey have excellent operating experience from domestic and international companies such as Oracle, Procter & Gamble, Huawei and ZTE; and based on our investment experience in China, the major reason why an investment does poorly has much to do with management.ö
Orchid Asia invests in expanding domestic enterprises with high barriers to entry and good growth prospects in the consumer services and products sector, as well as the outsourced manufacturing and services sector. It looks for companies with significant competitive advantages in their industries, which are sustainable for the foreseeable future. The source of such advantages could be something as direct as a government license or patent; or something less apparent such as a name brand, a uniquely low cost structure resulting from high market share, extensive distribution channels, advanced and proprietary technologies and processes or a unique source of natural resources.
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