Hillhouse, the Asia-focused investment firm led by Zhang Lei, has combined three of its public markets funds into a single vehicle valued at over $15bn, marking its largest fund reorganisation in years, according to a report by Bloomberg citing unnamed people familiar with the matter.
The move merges the firm’s flagship hedge fund with a long-only fund focused on Chinese domestic equities and a 2023 fund targeting beaten-down Chinese stocks. The final assets of the combined fund are still being tallied, pending investor decisions and performance adjustments since the merger.
Founded in 2005 with backing from Yale University’s endowment, Hillhouse grew into a major Asia-based investment firm with more than $100bn in assets at its peak, spanning public equities, private equity, venture capital, real assets, and private credit.
The consolidation comes amid a resurgence in Chinese equities – the MSCI China Index has risen over 33% this year – following years of pressure from pandemic-related sell-offs, geopolitical tensions, and domestic regulatory crackdowns. Investors had also been shifting to separately managed accounts and vehicles outside the US, reducing reported fund assets.
Zhang and Vivien Xu, head of public equities, will continue to oversee investments in the new combined fund, which will include a substantial allocation from Hillhouse partners themselves.
