Hillhouse taps investors, own cash in bid to raise US$8 billion
It seeks US$7 billion for an Asia-focused buyout fund, and US$1 billion to US$1.5 billion for a growth strategy
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[HONG KONG] Hillhouse Investment Management has reached out to investors and plans to use some of its own money to raise US$8 billion for its first new fund in five years, said sources.
The investment manager is seeking to raise US$7 billion for an Asia-focused buyout fund, and about US$1 billion to US$1.5 billion for a growth strategy, the sources added, asking not to be identified because the matter is private.
It is looking to put a total of US$1 billion to US$2 billion into the pools, they noted.
Hillhouse founder Zhang Lei and co-chief investment officer Michael Yi spoke with investors at a webinar in March, said sources.
The company has contacted potential investors in the Middle East, as well as endowments and family offices, sources noted. It aims to complete a first closing in October, they added.
Plans for the fundraising have been under way for some time. The Wall Street Journal reported in November 2024 that Hillhouse told clients that it was hoping to raise US$8 billion to invest in Asia.
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Its last series raised US$18 billion in 2021. Since then, it has faced pressure from a sell-off in Chinese equities and withdrawals from North American endowments, pensions and foundations as US-China relations became strained.
The company is raising money during a slow period for the Asia-Pacific buyout market, with some exceptions.
Funds took an average of 18 months to reach a final close in 2025, based on a Deloitte report published in March. Faced with stalling returns, investors are increasingly demanding more, including commitments from managers to put their own money into new funds.
Hillhouse is looking at new economy firms with low debt and the ability to generate cash for investments from its new fundraising, said a source.
The company, which has strategies across hedge funds, private equity, venture capital and private credit, managed more than US$100 billion in assets at one point.
It is too early to gauge how investors will respond to the fundraising plans. Underscoring the growing importance of the Gulf region to investment managers even during the Middle East conflict, Hillhouse opened an office in Abu Dhabi in April.
The five-year-old Hillhouse Fund V reported a net internal rate of return (IRR) – a key performance metric – of 10 per cent as at September 2025, based on materials provided by the company to prospective investors and seen by Bloomberg News.
Fund IV, which was raised in 2018, had a net IRR of 9.7 per cent.
Investments made by the company in recent years include engineering services provider Quest Global, Hong Kong-listed artificial intelligence company MiniMax Group and Wuxi AppTec’s clinical research services business.
It has shown increasing interest in Japan, where it bought real estate company Samty Holdings in 2025. BLOOMBERG
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