Hillhouse Investment Management Ltd. is a global

private equity Private equity (PE) is stock in a private company that does not offer stock to the general public; instead it is offered to specialized investment funds and limited partnerships that take an active role in the management and structuring of the co ...

firm with an

East Asian East Asia is a geocultural region of Asia. It includes China, Japan, Mongolia, North Korea, South Korea, and Taiwan, plus two special administrative regions of China, Hong Kong and Macau. The economies of Economy of China, China, Economy of Ja ...

heritage. Hillhouse was founded by Lei Zhang in 2005 with initial seed capital from the Yale University endowment and invests across

East Asia East Asia is a geocultural region of Asia. It includes China, Japan, Mongolia, North Korea, South Korea, and Taiwan, plus two special administrative regions of China, Hong Kong and Macau. The economies of Economy of China, China, Economy of Ja ...

Southeast Asia Southeast Asia is the geographical United Nations geoscheme for Asia#South-eastern Asia, southeastern region of Asia, consisting of the regions that are situated south of China, east of the Indian subcontinent, and northwest of the Mainland Au ...

, North America, and Europe. Hillhouse has Asian offices in Singapore,

Hong Kong Hong Kong)., Legally Hong Kong, China in international treaties and organizations. is a special administrative region of China. With 7.5 million residents in a territory, Hong Kong is the fourth most densely populated region in the wor ...

Beijing Beijing, Chinese postal romanization, previously romanized as Peking, is the capital city of China. With more than 22 million residents, it is the world's List of national capitals by population, most populous national capital city as well as ...

and

Shanghai Shanghai, Shanghainese: , Standard Chinese pronunciation: is a direct-administered municipality and the most populous urban area in China. The city is located on the Chinese shoreline on the southern estuary of the Yangtze River, with the ...

with additional international offices in

New York City New York, often called New York City (NYC), is the most populous city in the United States, located at the southern tip of New York State on one of the world's largest natural harbors. The city comprises five boroughs, each coextensive w ...

and

London London is the Capital city, capital and List of urban areas in the United Kingdom, largest city of both England and the United Kingdom, with a population of in . London metropolitan area, Its wider metropolitan area is the largest in Wester ...

. Hillhouse's

assets under management In finance, assets under management (AUM), sometimes called fund under management, refers to the total market value of all financial assets that a financial institution—such as a mutual fund, venture capital firm, or depository institutio ...

("AUM") were US$73.3 billion as of July 2021. In October 2021, Hillhouse raised US$18 billion for its fifth flagship

fund, breaking the previous record set by KKR's US$15 billion pan-Asia

fund raised that same year. Hillhouse manages capital for institutional clients such as university endowments, foundations, sovereign wealth funds, pension funds, and family offices. Hillhouse is a long-term fundamental research-driven equity investor, investing in all equity stages in sectors including consumer, healthcare, technology, and financials services.

History

Lei Zhang founded Hillhouse Investment in June 2005 with an initial US$20 million of seed capital from the

Yale University Yale University is a Private university, private Ivy League research university in New Haven, Connecticut, United States. Founded in 1701, Yale is the List of Colonial Colleges, third-oldest institution of higher education in the United Stat ...

endowment through David Swensen, Yale's Chief Investment Officer at the time. By 2017, the firm had participated in more private equity acquisitions in the Asia-Pacific region than any other

firm, totaling $26 billion worth of transactions. In 2020, Hillhouse spun off its

venture capital Venture capital (VC) is a form of private equity financing provided by firms or funds to start-up company, startup, early-stage, and emerging companies, that have been deemed to have high growth potential or that have demonstrated high growth in ...

unit into an independent fund. The new fund is called GL Ventures. As of 2020, Hillhouse was an investor in companies such as Airwallex.Airwallex aims to upend global payments system
, Henny Sender (7 July 2020), ''

Financial Times The ''Financial Times'' (''FT'') is a British daily newspaper printed in broadsheet and also published digitally that focuses on business and economic Current affairs (news format), current affairs. Based in London, the paper is owned by a Jap ...

''. Retrieved 17 May 2022. Hillhouse was nearing raising US$18 billion to back three new funds in May 2021, higher than the projected $13 billion in April 2021, according to reports, with $10 billion to be allocated to buyouts, and the rest "split between growth equity and venture." The company at the time was managing $100 billion.Hillhouse Builds Investing War Chest With $18 Billion Raise
, Lulu Yilun Chen (7 May 2021), ''

Bloomberg Bloomberg may refer to: People * Daniel J. Bloomberg (1905–1984), audio engineer * Georgina Bloomberg (born 1983), professional equestrian * Michael Bloomberg (born 1942), American businessman and founder of Bloomberg L.P.; politician a ...

''. Retrieved 18 May 2022. In August 2021, Hillhouse completed fundraising for its fifth flagship

investment fund at US$18 billion, the largest amount of capital raised by any

firm in Asia and breaking the previous record set by KKR's US$15 billion pan-Asia

fund, also raised in 2021. In 2022, Hillhouse started its first real estate-focused fund, the Hillhouse Real Asset Opportunities Fund (RAOF), with a total investment of more than $2 billion.

Performance

Hillhouse's rapid growth stemmed from its investing track record, with up to 52% annualized returns from inception until 2012"Low-profile Beijing fund with envious record" (subscription only)
''ft.com'', 12 January 2014. Partially retrieved 2015-08-18. and continued strong performance as the firm scaled.

Notable investments

Tencent Holdings Ltd: Some original $20 million provided from Yale was invested in Tencent Holdings in 2005. It was Hillhouse's earliest investment and one of their most profitable. JD.com: Hillhouse was an early investor in JD.com. At the time of the listing of JD.com on

NASDAQ The Nasdaq Stock Market (; National Association of Securities Dealers Automated Quotations) is an American stock exchange based in New York City. It is the most active stock trading venue in the U.S. by volume, and ranked second on the list ...

in May 2014, the company was valued at $26 billion. Hillhouse's original $255 million investment was, at the time of the IPO, valued at $3.9 billion. Blue Moon: Hillhouse invested in Blue Moon, a liquid detergent maker, in 2010 as its only outside institutional investor. Belle International: In July 2017, Hillhouse purchased footwear company Belle International for $6.8 billion. Global Logistic Properties: Hillhouse, together with Hopu Investment Management, purchased Singapore-based warehouse operator Global Logistic Properties in 2017 for $12 billion. At the time, it was the largest buyout of an Asian company. Little Freddie: In 2018, Hillhouse began investing in the food sector, including organic baby food and snack manufacturer Little Freddie, a Californian craft beer maker and a pet food brand. Miniso: In October 2018, Hillhouse signed a strategic investment agreement with Japanese-style retailer Miniso worth RMB 1 billion ($145.6 million). Philips Domestic Appliances: In August 2021, Hillhouse closed the deal of acquisition on the global domestic appliances business from Dutch conglomerate Philips. LifeStyles Healthcare: In December 2020, Hillhouse invested in Lifestyles Healthcare, an Australian global manufacturer of sexual wellness products. The company entered the Chinese market in 2006 after acquiring Jissbon. Gimborn: In 2016 Hillhouse acquired Gimborn, a German producer of cat litter and pet supplements, for an undisclosed sum. Zoom: Hillhouse was an investor in Zoom Video Communications in an early funding round in February 2015. Peet's Coffee: In 2017, Peet’s announced the formation of Peet’s Coffee China, an independently run joint venture formed by Peet’s Coffee and Hillhouse. BeiGene: Hillhouse co-led a round of financing for biotechnology company BeiGene in May 2015.

Joint ventures

Hillhouse established an exclusive joint venture focused on China with the US healthcare provider,

Mayo Clinic Mayo Clinic () is a Nonprofit organization, private American Academic health science centre, academic Medical centers in the United States, medical center focused on integrated health care, healthcare, Mayo Clinic College of Medicine and Science ...

. Hillhouse works with the Mayo organization to expand its healthcare outreach in China. In November 2017, Peet's Coffee China, a partnership between Hillhouse and San Francisco-based Peet's Coffee, opened the first Peet's Coffee roastery in

Investment philosophy

Hillhouse does deep and fundamental research on industries and business models, and applies the value investing philosophy in local contexts while investing in different geographies. According to the

, Hillhouse will often bring together leaders of their portfolio companies to share insights, believing that it is beneficial for executives to learn from one another. When it comes to buyout investments in traditional industries, Hillhouse has argued that technological innovation can be harnessed for job creation, saying that technology can act as an "equalizer" as opposed to a "disruptor."

Notable investors

According to the ''

Wall Street Journal ''The Wall Street Journal'' (''WSJ''), also referred to simply as the ''Journal,'' is an American newspaper based in New York City. The newspaper provides extensive coverage of news, especially business and finance. It operates on a subscriptio ...

'',

Stanford University Leland Stanford Junior University, commonly referred to as Stanford University, is a Private university, private research university in Stanford, California, United States. It was founded in 1885 by railroad magnate Leland Stanford (the eighth ...

pledged to invest about US$200 million with Hillhouse in August 2015. With Stanford's investment, the firm manages "money for at least six of the 10 wealthiest universities in the U.S." The other university investors in Hillhouse include

Princeton University Princeton University is a private university, private Ivy League research university in Princeton, New Jersey, United States. Founded in 1746 in Elizabeth, New Jersey, Elizabeth as the College of New Jersey, Princeton is the List of Colonial ...

Massachusetts Institute of Technology The Massachusetts Institute of Technology (MIT) is a Private university, private research university in Cambridge, Massachusetts, United States. Established in 1861, MIT has played a significant role in the development of many areas of moder ...

University of Pennsylvania The University of Pennsylvania (Penn or UPenn) is a Private university, private Ivy League research university in Philadelphia, Pennsylvania, United States. One of nine colonial colleges, it was chartered in 1755 through the efforts of f ...

University of Texas The University of Texas at Austin (UT Austin, UT, or Texas) is a public research university in Austin, Texas, United States. Founded in 1883, it is the flagship institution of the University of Texas System. With 53,082 students as of fall 2 ...

, and

. CPPIB committed US$200 million to Fund II in 2014, US$300 million to Fund III in 2016, and US$300 million to Fund IV in 2018.

References

External links

*
"Lei Zhang's Lecture"
at

Columbia Business School Columbia Business School (CBS) is the business school of Columbia University, a Private university, private research university in New York City. Established in 1916, Columbia Business School is one of six Ivy League business schools and one of ...

; notes by Zong Z. Peng via ''market folly.com'', 29 July 2015. {{Use dmy dates, date=May 2024 Chinese companies established in 2005 Companies of Singapore Investment management companies of Singapore Private equity firms of Singapore Venture capital firms of Singapore Financial services companies established in 2008