General Atlantic, Ctrip back tourism-focused China PE firm

The firm was founded in earlier this year by Tony Jiang, formerly a director at The Carlyle Group, and Alex Zheng, a co-founder of China's Plateno Hotels Group. With $400 million initial capital, Ocean Link is currently raising both renminbi- and US dollar-denominated vehicles to invest across the sub-verticals of China's travel sector. They include hotels and resorts, attractions, online and offline travel agencies, transportation services, and related business solutions providers.

Ocean Link was part of a consortium - including Ctrip and Tencent Holdings - that completed a $622 million privatization of China-based hotel-booking site eLong in May. In June, the PE firm submitted a bid for travel site Qunar worth about $4.4 billion. The deal came after Qunar agreed to an all-share merger with Ctrip last year. This resulted in search giant Baidu trading away its controlling stake in Qunar and Ctrip taking a 45% interest in the company.

In addition to those deals, Ocean Link has invested in: Mind Education, a China-based education tours and summer camps provider; Joint Wisdom, a data analytics services provider for the hotel industry; and Ruby Hotels, a Europe-based hotel chain that caters to lean luxury travelers.

As part of the agreement, Ctrip's chairman James Liang and General Atlantic's new head of China, Eric Zhang, have joined Ocean Link as board members. Zhang was previously a partner and managing director at Carlyle; he invested in Plateno Hotels Group and Kaiyuan Hotel Group during his tenure at the firm.

"The travel and tourism sector in China is at a pivotal period of growth. The industry's ongoing transition will provide Ocean Link with ample opportunities to bring capital and operational expertise to innovative companies serving the rising number of travelers in this market," Ctrip's Liang said in a statement.

According to the China National Tourism Administration, the number of Chinese residents travelling domestically rose 10.5% year-on-year to four billion in 2015, while Chinese outbound travelers increased 12% to 120 million during the same period. Goldman Sachs expects Chinese tourists to spend $450 billion on travel overseas by 2025, nearly double the $250 billion they spent last year.

General Atlantic has backed several global companies operating in the travel and tourism sector, including Airbnb, Aimbridge Hospitality, Priceline and Uber. Since the firm began making investments in China in 2000, it has committed $1.5 billion to 17 companies, including hotpot restaurant chain Xiabu Xiabu and online-to-offline (O2O) services platform Meituan-Dianping.

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