China private equity firm Orchid Asia raises $920 mln in sixth fund

HONG KONG Thu Aug 21, 2014 5:59am EDT

HONG KONG Aug 21 (Reuters) - Orchid Asia, one of China's oldest private equity firms, said on Thursday it had closed its sixth private equity growth fund, raising $920 million, well above its original target, on a record of strong returns to investors.

Orchid Asia VI, L.P. was launched in March 2014 as a $750 million fund, and public and private pension funds, insurance companies and endowments account for most of the investors. Pennsylvania Public School Employees Retirement System invested $75 million in the fund.

Orchid's success in raising nearly $1 billion contrasts with a dramatic decline in appetite for China private equity as investors, disappointed with fund performances in China, slow the pace of new investments. Total funds raised for private equity in China fell 31 percent in 2013 to $18.6 billion, following a steeper 49 percent decline the year earlier, according to data from Asian Venture Capital Journal.

Established in 1993, Orchid makes early-stage investments in growing businesses. The firm has invested in 70 companies and exited over 38, with past investments including Autohome Inc and Ctrip.com International Ltd.

According to information on the Pennsylvania Public School Employees Retirement System web site, Orchid's funds were returning a net multiple of 1.8 times investor money at Dec. 31. Orchid's fifth $650 million fund, raised in 2010, had a net internal rate of return of 55.1 percent, the site shows.

Orchid has offices in Hong Kong, Shenzhen, Shanghai, Beijing and Guangzhou. (Reporting by Stephen Aldred; Editing by Kenneth Maxwell)