CHINESE firms Primavera Capital Group and CITIC Private Equity (PE) plan to raise new U.S. dollar-denominated funds totalling around US$5 billion in a bid to bolster their firepower for offshore investments, sources said.

Over the past year, private equity firms have become increasingly active in overseas dealmaking, enjoying greater flexibility with offshore fundraising abilities.

Primavera, run by Fred Hu, former chairman of Goldman Sachs’ China division, aims to raise around US$2.8 billion in its third fund and has started tapping prospective investors, known as limited partners (LPs), one of the sources said.

The official fundraising has not been launched and the fund size is yet to be finalized, another source said.

CITIC PE, the investment arm of China’s top brokerage CITIC Securities, is looking to raise around US$2 billion and is targeting an early 2018 first close — an important milestone indicating the fund has crossed a minimum threshold and can begin making investments, another source said.

CITIC PE confirmed the fundraising plan, saying the fund was officially launched in September.

The fund, which has a hard cap set at US$2.2 billion, is significantly oversubscribed and targeting a final close in the first half of next year, it said.

The two firms will join a slew of Chinese PE companies, such as Hony Capital, FountainVest Partners and China Media Capital, that have raised U.S. dollar funds since last year, according to data provider Preqin.

As of August, China-based PE firms had targeted to raise US$25.9 billion in 26 buyout funds, and an aggregate of US$48.3 billion in 42 growth funds, Preqin data shows.

Acquisitions made by Chinese PE firms amounted to US$21.5 billion as of Monday, with the number of outbound deals jumping over 50 percent from a year ago, Thomson Reuters data shows. (SD-Agencies)