Hillhouse secures $10.6b of dry powder for Asia dealmaking

The private equity fund led by Chinese dealmaker Lei Zhang closes Fund IV and stresses opportunities in giving traditional businesses a digital makeover.
Hillhouse founder Lei Zhang
Hillhouse founder Lei Zhang

China-focused private equity giant Hillhouse Capital has closed its Fund IV at $10.6 billion as it seeks to harness its digital expertise in transforming traditional businesses.

Announcing the fundraising on Wednesday, Hillhouse said its dealmaking would focus on the healthcare, consumer, technology and services sectors globally, with a particular emphasis on Asia.

Hillhouse believes its technological savvy will allow it to restore growth to staid businesses – pointing to the success of Belle International, the Chinese shoe retailer it took private in a $6.8 billion deal last year. Belle International has been performing ahead of management expectations since the privatisation, a person familiar with the matter told FinanceAsia earlier.

But the fundraising comes at a time when private equity valuations are beginning to look stretched — as illustrated by an ambitious bid by a consortium including Hillhouse to buy China's biggest restaurant operator, Yum China.

"We are deeply grateful for the ongoing trust of our partners," Lei said in the statement announcing the deal.

"We look forward to working with innovation-minded, world-class businesses and management teams seeking to deploy technology-driven solutions to create value for all stakeholders.”

Founded in 2005, Hillhouse has made its name as a prolific investor in the technology sector at home and abroad. Its past investments in China include Baidu, Tencent and JD.com.

¬ Haymarket Media Limited. All rights reserved.