Hillhouse Capital’s public investment arm assets tumbled by a third last year, according to US regulatory filings, providing rare insights into one of Asia’s investment behemoths.
(Bloomberg) — Hillhouse Capital’s public investment arm assets tumbled by a third last year, according to US regulatory filings, providing rare insights into one of Asia’s investment behemoths.
HHLR Advisors Ltd.’s assets fell to $41.4 billion at the end of December, from $62.7 billion a year earlier, according to the filings. By contrast, assets of Hillhouse Investment Management Ltd., the unit that focuses on less liquid investments, edged up 2.2% to $44.7 billion.
The asset slump at billionaire Zhang Lei’s firm follow a year in which most equity markets tumbled amid rising interest rates, shifting regulatory policies and geopolitical tensions. The company is known for attracting some of the biggest US endowment and pension funds, partly due to its expertise in China, where a benchmark of offshore stocks dropped 24% last year.
A representative for Hillhouse, which oversees more than $100 billion globally, declined to comment. The firm didn’t provide a reason for the asset decline in the filings, which don’t account for all the group’s assets, such as money flows from those two units into non-US-registered entities under Hillhouse.
The value of private and public universities’ investments with HHLR slumped 75% over the past year. That more than halved their share to below 1% of discretionary regulatory assets, according to the filings dated March 31. Sovereign wealth funds and so-called “foreign official institutions” saw the dollar value of their assets with HHLR decline by two-thirds. In both these cases, about 90% of the funds were moved to other Hillhouse entities, according to a person familiar with the matter who declined to be identified discussing private issues.
The “pooled investment vehicles” accounted for more than 90% of assets at the end of last year, the filings show.
Zhang, the Chinese born tycoon, founded Hillhouse in 2005 with $30 million from the endowment fund at Yale University, his alma mater. He went on to build it into an investment empire, dabbling in China technology, consumer and health-care companies. He made a name for betting on Tencent Holdings Ltd. and JD.com Inc. relatively early. In more recent years, Hillhouse has started to look for global opportunities.
(Updates with endowment flows in fifth paragraph)
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