SAIF raising $1 bln private equity fund

BEIJING Thu May 13, 2010 11:43am BST

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BEIJING (Reuters) - Asia private equity firm SAIF Partners said it is close to completing a new fund with more than $1 billion (680 million pounds), and plans to raise its largest-ever yuan fund in the second half, drawing on strong demand for China investments.

SAIF, one of China's oldest private equity firms and whose past investments include Shanda Interactive SNDA.O and Perfect World (PWRD.O), expected to close its $1 billion-plus fund by the end of next month, Principal Zhao Yanchao told Reuters in an interview on Thursday.

The company planned to invest in four to five companies this year, about the same as in 2009, with $10-100 million per investment, aiming to take a 10-40 percent stake in each company, he said.

Zhao declined to say what areas his company would focus on, but expressed reservations about the popular clean energy and internet sectors that have attracted attention in recent years.

"We will take a cautious approach as green energy may be immature in terms of commercial viability," he said. "The valuations of internet companies are already a bit high and the export sector is facing appreciation of the yuan."

The firm's investments last year included a biopharmaceutical company and two agricultural product companies.

Established in 2001, SAIF manages about $3 billion worth of U.S. dollar-denominated funds and yuan funds worth about 1.3 billion yuan. It has invested in about 80 companies in China in recent years, in consumer products and services, technology, media, financial services, medical and healthcare, and manufacturing industries.