Hillhouse Capital is close to completing its latest round of financing, with three new funds raising about $18 billion (116 billion yuan), well above last year's expected target of $13 billion, according to Bloomberg. It is understood that about $10 billion will be spent on acquisitions, with the rest allocated between growth equity and venture capital.

It is worth noting that since its inception in 2005, Hillhouse Capital has started from $20 million to $100 billion (about 650 billion yuan) under management, a nearly 5000-fold increase in 16 years.

In 2020, Hillhouse made frequent moves in the capital market, and investors such as Blue Moon, JD Health, Bull Group, XPeng Inc., and perfect Diary went public one after another, spending 10 billion yuan on Ningde Times, Longji shares, Enjie shares and Tongwei shares. Participate in the fixed growth of Kellein and Kelitai, as long as it is a large-scale investment in health care, new energy, consumption and other fields.

Which industries will the newly raised hundreds of billions of funds be invested in? Combing through Hillhouse's past investment layout, it is not difficult to find healthcare, new energy, consumption, cloud technology, enterprise services or its important investment direction.

Raise a record 116 billion yuan and have plenty of "ammunition"

Although encountered the epidemic, but throughout 2020, Hillhouse Capital investment almost non-stop, through fixed growth, acquisition and other ways to vigorously layout. After completing a series of big investments, Hillhouse finally began to replenish its ammunition.

Hillhouse is on the verge of completing its latest round of financing, attracting about $18 billion (116 billion yuan) to support its three new funds, according to Bloomberg.

According to people familiar with the matter, Hillhouse Capital is currently replenishing funds as the COVID-19 epidemic has brought opportunities to the economy. Hillhouse has attracted money from endowments and pension funds, and while the final details may change, the deal is nearing completion.

It is understood that the $18 billion raised is higher than the initial target of $13 billion when the fund-raising was launched in April last year. About $10 billion will be spent on acquisitions, with the rest allocated between growth equity and venture capital, a person familiar with the matter said at the time.

It is worth noting that Hillhouse last raised $10.6 billion in 2018, setting a record for private equity funds in Asia at the time. The three funds raised $18 billion at a time, apparently another record large-scale fund-raising.

With surplus grain in hand and no panic in heart, Hillhouse has a sufficient ammunition accumulation of 110 billion yuan. Hillhouse can then patiently lay out and strike with heavy punches.

Frequent moves, heavy storage of medicine, consumption and new energy

In 2020, Hillhouse made frequent moves in the capital market, and the investment companies such as Blue Moon, JD Health, Bull Group, XPeng Inc. and perfect Diary went public one after another, bringing rich returns for Hillhouse.

In Blue Moon, for example, Hillhouse invested $45 million in Blue Moon's angel wheel in 2010 and added $1.03 million (6.8 million yuan) the following year. HCM China, owned by Hillhouse Capital, holds a 10 per cent stake in Blue Moon, according to the prospectus.

After listing, Blue Moon's market capitalization once reached 100 billion Hong Kong dollars. At present, Blue Moon has a market capitalization of HK $57.7 billion, while Hillhouse Capital holds a market capitalization of more than HK $5.7 billion, with an initial investment of only Rmb300m and a book surplus of more than Rmb4 billion.

In the secondary market, Hillhouse makes a large-scale layout through fixed growth, acquisition and other ways. Among them, in the field of new energy, invested 10 billion into the Ningde era, Longji shares.

On December 20, 2020, Longji shares announced that Hillhouse Capital contributed 15.8 billion yuan to accept 226 million shares of Li Chunan, the second shareholder of the company. after the completion of the transfer, Hillhouse Capital became the second largest shareholder of Longji shares with a trading price of 70 yuan per share. As of May 7, Longji's latest share price was 96.76 yuan, an increase of 38%, with a floating profit of about 6 billion yuan.

In July last year, Hillhouse Capital participated in the Ningde era with 10.6 billion yuan. Up to now, the share price of Ningde era is 367.28 yuan, which is 128% higher than its fixed increase price of 161yuan per share, and the floating profit is about 13.5 billion yuan.

In addition, Hillhouse Capital also participated in the fixed increase of Enjie shares and Tongwei shares, invested in new energy vehicles such as XPeng Inc., Li Auto Inc., NIO Inc. Automobile, as well as Xinyi Energy in Hong Kong stocks, and continued to be optimistic about new materials and batteries in the upper and middle reaches of the new energy industry chain.

In the field of medicine and medical treatment, he has participated in the fixed increase of Kailiying, Kelitai and national porcelain materials, and has continued to hold heavy pharmaceutical stocks, including BeiGene, Ltd., Wuxi Apptec, Heng Rui Pharmaceutical, Aier Ophthalmology and so on.

On Feb. 13, Hillhouse announced its position in U.S. stocks at the end of the fourth quarter of 2020 at the Securities and Exchange Commission (SEC). Hillhouse holds shares in 95 companies in the U. S. stock market, with a total market capitalization of $12.5 billion, according to data. Among them, more than half of the enterprises in the pharmaceutical and medical field, and 15 of the 28 new and increased holdings in the fourth quarter are in the field of biopharmaceuticals.

Consumption is another sector that has been heavily positioned by Hillhouse. The consumption and investment map of Hillhouse includes important enterprises such as Blue Moon, quality Shop, Bull and so on.

On March 26, 2020, Hillhouse spent 34 billion yuan to win Philips's home appliance business, which became another 10 billion major M & A transaction after Belle International, GLOS and Gree Electric Appliances.

Judging from Hillhouse's past investments, it is clear that heavy holdings in China, biomedicine and hard technology are still its three main lines.

Zhang Lei, founder of Hillhouse, made it clear at the Asian Financial Forum in January that in the post-epidemic era, the medical industry will still be the focus of Hillhouse in the future, and cloud technology and enterprise services will also be the future investment direction.

Including the fundraising, Hillhouse Capital may have $100 billion under management. Since its establishment in 2005, Hillhouse Capital has started at US $20 million and has grown nearly 5000 times in 16 years.