Exclusive: Primavera collects $400m towards first close

The former boss of Goldman China, Fred Hu, aims to raise $1.5bn for his firm’s second vehicle

Primavera Capital, a China-focused private equity fund, has raised at least $400 million towards a rolling first close on its latest private equity fund, people familiar with the matter revealed to Private Equity International.

It is understood that the fund, which is targeting $1.5 billion to invest in China-focused businesses, will keep the initial closing open for investors, anticipating to raise between $400 and $500 million before year-end – possibly surpassing the $500 million mark. The fund has no specified hard cap.

Primavera opted to close on a rolling basis as some LPs are taking time with the process, one source explained. Nevertheless, various LPs have made soft commitments and are finalising paperwork now, he added.

Typically, GPs use rolling closes to attract investors as earlier closings offer better terms, while allowing firms to disclose other LPs that have committed to the fund.

Primavera declined to comment.

The vehicle is the firm’s second, having raised about $2 billion for its debut US dollar offering in 2011, shortly after founder Fred Hu left his role as China chairman at Goldman Sachs.

At the global investment bank, Hu was instrumental in building the firm's franchise in the Greater China region. A number more Primavera executives are Goldman alumni.

It is unclear how far Primavera Capital Fund I is deployed, but the firm recently backed out of its proposal to acquire US-listed Shanda Games, intending to make the investment from the first fund, according to Shanda documents released earlier.

Primavera, The Carlyle Group and FountainVest Partners, said in September they would not participate in the management buyout, which would see the Chinese gaming business de-listed from the NASDAQ.

Primavera had offered to acquire Shanda Games $3.45 per class A or class B ordinary share, or $6.90 per American depositary share, in January this year, with Carlyle and FountainVest joining the group in May and April respectively.

The firm, which has offices in Beijing and Hong Kong, also has its first RMB fund in the market, a 2013 vintage that has raised about RMB 3 billion ($490 million; €391 million) towards its RMB 6 billion target, according to PEI’s Research & Analytics division.