Chinese investment firm Primavera Capital Group, an early investor in billionaire Jack Ma’s Alibaba Group, is reportedly seeking to raise $300 million for a private credit fund.
Primavera, which invests in the global market with a focus on China, is said to have built out the credit strategy earlier this year with the recruitment of Jeffrey Lau as a partner as well as CEO and CIO of its credit investments team. Lau’s appointment led to the launch of the dedicated private credit fund, media outlet AVCJ reported on Monday.
In a reply to DealStreetAsia on Tuesday, Primavera said it has no comment to offer at this stage.
The report comes at a time when private credit funds, which refer to non-bank lenders providing loans to typically small- and medium-sized enterprises, are fast emerging as an attractive asset class in Asia.
Asia’s private credit assets under management (AUM) more than doubled to about $57 billion in mid-2019 from late 2014, according to data from British law firm Simmons & Simmons and accounting firm Ernst & Young. Global fund management giants, including KKR & Co, Apollo Global Management, and Blackstone, have all announced substantial capital allocations to their Asia credit strategies in recent years.
As the latest to set up a dedicated private credit fund, Primavera is potentially looking to diversify strategies across its range of US dollar and Chinese yuan-denominated funds investing in everything from early-stage venture funding, growth- and late-stage investments, and private credit to restructuring financing, carve-outs, and buyouts.
Founded in 2020, the firm is now in the market raising its fourth US dollar fund with a target of up to $5 billion, according to a Reuters report in March 2021. Its USD Fund III was closed in 2019 at $3.4 billion, media outlet Private Equity International (PEI) reported, citing sources.
With offices in Beijing, Hong Kong, Singapore, and Palo Alto, Primavera manages capital for financial institutions, sovereign wealth funds, pension plans, endowments, corporations, and family offices around the world. As of September 30, 2021, it booked approximately $17 billion in total AUM.
Lau, who joined Primavera in May, currently chairs the firm’s Credit Investment Committee, according to his LinkedIn page. Prior to Primavera, he led and managed private investments in partnership with sovereign wealth funds, corporates, and family offices.
He served as an investor and board member of Village Roadshow Entertainment Group in California, the US, between 2012-2017. Previously, Lau oversaw special situations, structured credit, and equity investments in Greater China for US alternative asset management firm Sculptor Capital Management, which was previously known as Och-Ziff Capital Management Group.