Primavera closes second China fund at $1.9b

A September 2016 filing indicated that the vehicle launched in late 2014 and had received $482.8 million from 53 investors. AVCJ understands the total number of LPs is around 100. According to AVCJ Research, they include Pennsylvania State Employees' Retirement System (PennSERS) and Taiwan Semiconductor Manufacturing, as well as the Second Swedish National Pension Fund, Taikang Insurance Group and Varma Mutual Pension Insurance. Primavera declined to comment on the fundraise.

Primavera was founded in 2010 by Fred Hu, formerly Greater China chairman at Goldman Sachs, and closed its debut US dollar fund at $1 billion the following year. The firm also manages renminbi vehicles. With more than 30 investment professionals based in Beijing and Hong Kong, Primavera pursues growth capital, buyout and control, and restructuring and turnaround investments.

It is one of a clutch of relatively young Chinese private equity firms that have seen a substantial uptick in fund size between vintages. Earlier this year, FountainVest Partners closed its third vehicle at $2.1 billion, having raised $1.35 billion last time around, while Boyu Capital closed its third fund at $2 billion, compared to $1.5 billion for the predecessor vehicle.

The fundraise also comes after Jie Lian, one of Primavera's founding partners, departed to become president of Chinese movies-to-gaming company Perfect World. He remains involved in the firm as a senior advisor.

In September, Primavera committed $410 million to Yum China, a spin-out from Yum Brands, which owns fast-food giants KFC, Pizza Hut and Taco Bell, while Ant Financial Services put in $50 million. The two firms could hold up to 10% of Yum China, conditional on the average trading price of US-listed Yum China and their warrants being fully exercised. Hu is non-executive chairman of the business.

Primavera is also an investor in Ant Financial, participating in a Series A round for the Alibaba Group affiliate in 2015 and re-upping in a $4.5 billion Series B round in April of this year. Its Alibaba exposure extends to logistics platform Cainiao Network Technology, having joined a funding round of unspecified size in March.

An earlier commitment to Alibaba prior to the company's IPO in 2014 is said to rank as one of the most successful investments in the private equity firm's first fund. Other listings by Primavera portfolio companies include advertising business Focus Media and file-sharing and download service Xunlei.

Meanwhile, a significant cross-border deal came in August, with an agreement to acquire Australia-listed nutrition and healthcare products company Vitaco for approximately A$313 million ($238 million). Primavera will own a 40% stake in the company with Shanghai Pharmaceuticals holding the balance. Another cross-border transaction that didn't come off was minority participation in an Anbang Insurance-led consortium that sought to buy Starwood Hotels & Resorts Worldwide.

Credit Suisse was the placement agent for Primavera Capital Fund II, with Dechert serving as fund formation counsel.

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• Topics
• Greater China
• Fundraising
• Growth
• Buyout
• GPs
• LPs
• China
• Primavera