Providence boosts LP distributions to $4.3bn

The $200m exit of Hulu brings Providence’s LP distributions to $4.3bn since July 2011 and comes roughly two months before the firm expects to close its seventh fund.

Providence Equity Partners has sold its 10 percent stake in online television distribution company Hulu for $200 million five years after investing $100 million in the business, according to source familiar with the situation.

The exit brings Providence’s total distributions to limited partners to $4.3 billion since July 2011, the source said. The firm invested in Hulu from its sixth fund that raised $12 billion in 2007.

Providence declined to comment on the transaction.

The exit comes as Providence seeks to wrap up fundraising for its seventh fund, which is set to close on roughly $5 billion in December, three people with knowledge of the firm previously told Private Equity International.

Providence’s chief executive officer, Jonathan Nelson, announced at the firm’s annual meeting last week that Fund VII, which was targeting $6 billon, will likely wrap up fundraising on around $5 billion, according to two limited partners who attended the meeting. The $5 billion prediction is not set in stone, however, and could increase, according to another person who attended the meeting.

Providence launched its seventh fund last year and had initially talked to LPs about targeting a range of $6 billion to $8 billion for the vehicle. Fund VII’s official goal on the private placement memorandum was set at $6 billion.

Following the sale of Hulu, Providence will still have existing TV-related investments in US sports and entertainment channel YES Network, Spanish-language media company Univision Communications and mail order company Home Shopping Europe, which it acquired in July.

Providence focuses on investing in media, communications, education and information companies and manages funds with $27 billion in commitments. Last month, the firm sold a minority interest in itself to the Florida State Board of Administration, one of the firm’s LPs, and another Providence investor.