Primavera reaches $1.5b first close on China fund

A US securities filing from earlier in May indicated that $490.5 million has been raised from 33 investors, but this does not include commitments from all LPs. The first close was confirmed by sources familiar with the situation. Primavera declined to comment on fundraising.

The private equity firm was founded in 2010 by Fred Hu, formerly Greater China chairman at Goldman Sachs. It raised $1 billion for its debut US dollar-denominated fund in 2011 and then closed Fund II at $1.93 billion in 2016, exceeding the target of $1.5 billion. Primavera also manages renminbi vehicles.

The GP makes growth capital, buyout and special situations investments. Education has featured prominently recently, with Primavera acquiring study-abroad program provider WorldStrides – a joint deal with Eurazeo – and Stratford Schools. Both companies are US-based but have China expansion angles. Another investee, Sunlands Online Education, went public in the US.

Having done well on a minority investment in Alibaba Group in Fund I, Primavera continues to back new economy companies in China. In the past 18 months, it has participated in funding rounds for online second-hand car-trading platform Souche, outsourced credit services provider Dashu Finance, and Koubei, Alibaba’s online-to-offline local services platform.

Other Fund II investments include Yum China – a US-listed spin-out from Yum Brands, which owns fast-food businesses KFC, Pizza Hut, and Taco Bell – telecom equipment manufacturer Qingdao Hisense Broadband Multimedia, facilities management services provider ESG Holdings, and Australian nutrition and healthcare products manufacturer Vitaco. 

Several China-focused managers are currently in the market raising mid to large-cap funds. CITIC Private Equity is expected to close its third US dollar vehicle at around $2 billion, while Hopu Investments reached a first close of $2 billion earlier this year on a fund that has a target of $2.5 billion. CDH Investments is also seeking $2.5 billion for its latest fund.

The two entities that came out of New Horizon Capital, Advantech Capital and Redview Capital, want to raise a combined $1.5 billion for their latest funds. Finally, two spin-out managers – DCP Partners, set up by the former China heads of KKR, and Nexus Point, established by the ex-Greater China head at MBK Partners – are targeting at least $1.5 billion and $750 million, respectively.

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