Hillhouse Capital Management, the Chinese investment firm that last year helped lead Asia’s biggest-ever buyout deal, is targeting to raise about $6 billion in a new private equity fund, people with knowledge of the matter said.
Hillhouse has started gauging interest from potential investors, one of the people said, asking not to be identified because the information is private. If successful, it will be the biggest dollar buyout pool raised by the firm, which started in 2005 with $20 million from Yale University’s endowment.
Founder Zhang Lei parlayed that initial capital into the more than $35 billion of assets that Hillhouse manages today. The investment firm was an early backer of Tencent Holdings Ltd., which is now Asia’s biggest Internet company, and Chinese e-commerce operator JD.com Inc.
Hillhouse participated in more private equity purchases in Asia Pacific last year than any other investment firm, racking up $26 billion of transactions, according to data compiled by Bloomberg. It beat Bain Capital, which was involved in $20.5 billion of deals in the region, and KKR & Co., which announced $16 billion of acquisitions, the data show.
The capital raising is still at an early stage, and details of Hillhouse’s plans could change, the people said. A representative for Hillhouse declined to comment.
Zhang, a Yale alumnus who went on to work at the university’s investment office led by David Swensen, founded Hillhouse in 2005. In its early years, Hillhouse used its Gaoling Fund to make long-term investments in both publicly-traded and privately-held companies. It raised $2.2 billion in 2014 for its first pool dedicated to private-equity investments. A second such fund gathered $4.2 billion in early 2016.
An investor group including Hillhouse and Hopu Investment Management agreed last year to buy Singapore-based warehouse operator Global Logistic Properties Ltd. for about S$16 billion ($12 billion). That deal surpassed the 2016 takeover of Qihoo 360 Technology Co. as the largest-ever buyout of an Asian company, data compiled by Bloomberg show.
Hillhouse teamed up with CDH Investments in last year’s $6.8 billion buyout of Belle International Holdings Ltd., the biggest women’s footwear retailer in China. It’s also an investor in BeiGene Ltd., the Chinese cancer drug developer whose shares have more than tripled in U.S. trading over the past year.
The firm has been beefing up its executive ranks. Mervyn Chow, who was Credit Suisse Group AG’s most senior China banker, will join Hillhouse in a senior role in March focusing on the private equity business, a person with knowledge of the matter said last month.
Private equity funds raised a record $453 billion globally last year, as investors sought out higher returns than what’s available from the public markets, according to Preqin. A growing portion of money went to the largest funds, and it took managers less time to reach capital-raising targets. KKR said in June it raised $9.3 billion for its third Asia fund, amassing the biggest ever pool by a private equity firm in the region.