In December 2017, FinanceAsia announced its annual Achievement Awards winners to honor the best financial institutions across the region. Hillhouse Capital was the winner of the Best Private Equity Firm Award. Below is a conclusion from FinanceAsia setting out why Hillhouse was the winner of the award:
Founded by Lei Zhang in 2005, Hillhouse Capital excited us with its mantra of investing for growth by injecting a layer of technology into companies facing disruption. Unlike the old tried-and-tested private equity models of buying companies with debt and then cutting costs, Hillhouse sees the people and networks of traditional industries as assets that can be enhanced with technology.
The firm can draw upon its own ecosystem of several hundred people as well as the relationships it has built up over the years. It’s early tech investments read like a who’s who of Chinese industry’s leaders: Tencent, Baidu and JD.com.
For this award we have tended in the past to focus more on exits because that allows us to assess both the work that the private equity firm has put in as well as the return to investors. However, this year Hillhouse has simply blown us away with the scale of its ambitious deals.
Hillhouse invested in the buyouts of Belle International, China’s biggest women’s footwear retailer and GLP, one of the biggest warehousing companies in China.
Hillhouse also doubled down on some investments, such as WuXi Biologics, a Chinese contract drug research and development company, which priced at the top of its marketed range when it was listed in Hong Kong.
Hillhouse also gained access to some hot early-stage investment opportunities this year, including a $550 million fundraising by the Southeast Asia-focused e-commerce startup Sea.
The firm can boast cross-border investments too – in one case bringing San Francisco-based Peet’s Coffee, a craft chain rivaling Starbucks in its home market, to China, in another partnering with Britain’s Aviva and Tencent to develop a digital insurance company in Hong Kong.
Worth noting also, given our traditional emphasis on exits, is that Hillhouse has a pipeline of them building up. We Doctor Group, an online healthcare services firm, for example, is planning an IPO in Hong Kong in the second half of 2018.