Chinese private equity (PE) firm Primavera Capital Group has raised $546.7 million for its fourth US dollar fund, shows its latest filing with the US Securities and Exchange Commission (SEC), while the firm is reportedly targeting a hard cap of up to $5 billion.
In the SEC filing submitted on June 1, Primavera disclosed that it already secured a combined amount of $546.7 million from 15 investors for Primavera Capital Fund IV. The minimum investment that it accepted from any outside investor was $10 million. Fred Hu, founder and chairman of Primavera, signed the filing.
The disclosure came after Reuters reported this March, citing two people with direct knowledge of the matter, that Primavera was raising $4 billion for the fourth dollar fund, with a hard cap of $5 billion. The firm aimed to reach the first close within two months, one the people said.
The move by Beijing-based Primavera, an early investor in billionaire Jack Ma’s Ant Group, made it the latest Chinese PE company to target record fundraising this year.
Boyu Capital, another Ant investor which is co-led by the grandson of former Chinese president Jiang Zemin, was also raising a new fund targeting as much as $6 billion, according to a Reuters report in February. FountainVest Partners, led by former Goldman Sachs banker Frank Tang, was said to set sights on raising $3.5 billion for a fund, Financial Times reported in April.
Primavera’s US dollar Fund IV followed the close of Primavera Capital Fund III at $3.4 billion in November 2019. The predecessor fund, which initially had a $2.8-billion target, was backed by investors like the Pennsylvania State Employees’ Retirement System and the New York State Teachers’ Retirement System.
Hu founded Primavera in 2010 after his tenure as partner and chairman of Greater China at Goldman Sachs, where he was instrumental in building the firm’s franchise in the region. With offices in Beijing, Hong Kong, and Silicon Valley, Primavera manages both RMB-denominated and US dollar funds for financial institutions, sovereign wealth funds, pension funds, family offices, and corporations, among others.
The firm employs a range of strategies, such as growth capital, buyout and control-oriented, as well as cross-border investments. By the end of September 2020, it has backed nearly 60 companies across the fields of TMT, consumer, financial services, healthcare, and education.
Some of its prominent portfolio firms include TikTok-owner ByteDance; Chinese online video firm Kuaishou Technology; Alibaba’s logistics affiliate Cainiao; ride-hailing giant Didi Chuxing; online grocery app Xingsheng Youxuan; electronic vehicle (EV) brands Xpeng and Nio; dairy products makerJunlebao Dairy; artificial intelligence (AI) companies SenseTime and 4Paradigm; and Lufax, one of the biggest online wealth management platforms in China.
Primavera also runs Primavera Venture Partners, its early-stage arm that focuses on investments in advanced technologies, such as AI, new-generation industrial Internet, and healthtech.
Earlier this year, it joined a rising trend among Greater China-focused fund managers to launch a special-purpose acquisition company (SPAC) – a shell company that raises funds to acquire a private firm with the purpose of taking it public. Its SPAC Primavera Capital Acquisition filed to raise up to $300 million in an initial public offering (IPO) in the US in early January.