OCP Asia has reached a final close of $200 million for its latest credit vehicle, Orchard Landmark II.
The fund, which has a seven-year life, is OCP’s first closed-ended private credit fund. It will provide senior secured loans to small- and medium-sized companies in Asia with an investment term of two to three years. The typical ticket size of the investments will range between $40 million to $70 million. It seeks an unlevered return of 20 to 25 percent.
The launch of the vehicle was precipitated by demand from a small group of existing investors. The majority of the capital in the fund has come from public pensions.
The predecessor of the fund is Orchard Landmark I, an open-ended fund which is still open to new capital. The fund has reached a size of over $1 billion and offers a variety of corporate loans. Similar to its latest fund, it targets between 20 to 25 percent per annum with a ticket size between $40 million to $75 million.
As the banks pull back from lending in Asia, OCP sees a long-term structural mismatch between corporate credit demand and supply which creates a highly attractive market opportunity in Asia-Pacific.
“We are sector- and market-agnostic but we think the service and consumer industry in Australia and ASEAN is providing a very favourable opportunity for us now,” Dan Simmons, partner of OCP Asia told PDI.
OCP Asia advanced a senior secured loan in November 2015 to the Australian lithium production company Galaxy Resources and financed Aeon Metals’ acquisition of copper resources in Australia, according to media reports.
OCP is a credit-oriented investment fund manager providing customised financial solutions to Asia-Pacific SMEs. It currently has assets under management of over $1.1 billion and has managed more than $4 billion of secured lending around the region over the last 10 years.