Ping An-backed Lufax raises $1.3 billion at lower valuation: sources

HONG KONG (Reuters) - Ping An-backed Lufax has raised $1.33 billion in its latest funding round from a dozen investors, at a valuation below expectations of the financial technology company, people with direct knowledge of the matter told Reuters.

FILE PHOTO: A sign of wealth management platform Lufax is seen during an expo in Beijing, China December 11, 2015. REUTERS/Stringer

The fundraising values Lufax, set up in 2011 by top insurer Ping An Insurance Group Co of China Ltd, at $38 billion prior to closing, the people said.

Lufax was aiming for a $40 billion valuation when it started raising funds in June, after postponing plans for an initial public offering (IPO) in Hong Kong.

The fundraising drew in a diverse group of investors, the people said on condition of anonymity as the information is confidential. Chinese private equity firm Primavera Capital was a lead investor, two of the sources told Reuters.

Among the main investors were Qatar Investment Authority, Hong Kong-based All-Stars Investment and Japanese financial firm SBI Holdings, the people added.

Financial institutions including JP Morgan, Macquarie Group, UBS, UOB and the private equity arm of Goldman Sachs, also joined as investors, the sources added.

Other investors included Hong Kong investment firm LionRock Capital, London-based venture capital fund Hedosophia and Hermitage Capital, an investment firm primarily focused on Russian markets, according to the people.

The fundraising amount could change if more investors join at a later stage, one of the people added.

Lufax, Macquarie, UBS and an SBI spokesman declined to comment. Hedosophia and Hermitage could not be reached, while the other investors did not respond to requests for comment.

Lufax, formally Shanghai Lujiazui International Financial Asset Exchange Co Ltd [IPO-SLJZ.HK], seeks to fund growth while its Hong Kong IPO is on hold due to changing regulation in online consumer lending - a core business.

Lufax hired five banks to work on an IPO in Hong Kong to raise up to $5 billion in the first half of 2018, Refinitiv’s IFR reported last December.

It postponed the IPO as authorities formulated regulation for the fast-growing consumer lending sector under a broader campaign to curb financial risk, sources have said.

Under a proposal circulated in December, online micro-lenders will need to be licensed and will be prohibited from lending to borrowers with no sources of income or no specific purposes for the funds.

There is no clarity when the IPO plan will resume, one of the people said, adding that Lufax is looking to shift its business away from consumer lending before its IPO.

Lufax raised $1.2 billion in its last funding round in 2016, valuing the firm at $18.5 billion. Existing investors include BlackPine Private Equity Partners Fund LP, CDH Investments and Guotai Junan Securities Co Ltd, according to data provider Crunchbase.

Reporting by Kane Wu in Hong Kong, additional reporting by Sam Nussey in Tokyo; Editing by Himani Sarkar