Hillhouse Investment has launched fundraising for its next private equity fund targeting $7 billion, two sources with knowledge of the matter said, in a key test of investor appetite as deal activity gathers pace in Asia.
The fundraising initiative by the investment firm, founded in 2005 by China-born dealmaker Zhang Lei, comes as it continues its global expansion, with teams in London, Singapore and Tokyo among other markets.
The official fundraising launch follows the firm’s record-setting $18 billion fundraising in 2021, Asia’s largest such exercise. The capital raised was split into three vehicles for buyout, growth and venture investments, respectively.
Hillhouse did not respond to a Reuters request for comment. The sources declined to be identified as the information is confidential.
FUNDRAISING REVIVAL
A total of $25.2 billion has been raised in Asia Pacific private equity funds as of November 20, Preqin data showed, a significant drop from last year’s annual value of $66.7 billion and well below the all-time high of $241.2 billion in 2016.
The fundraising will be a litmus test of whether investors are signing up for Hillhouse’s global ambitions at a time when private market investors are hungrier for capital returns than for deploying new capital after years of stagnant exits.
Now, with warming capital markets allowing exits via initial public offerings and assets in Japan and India becoming more attractive to investors, fundraising momentum is growing.
Several global firms are ramping up efforts to raise sizeable Asia-focused buyout funds over the next 12 to 18 months. KKR & Co. started raising its fifth Asia private equity fund last week, targeting $15 billion, Reuters reported.
Blackstone has raised more than $10 billion for its third Asia private equity fund, which has a maximum fundraising limit of $12.9 billion, said a separate person with knowledge of the matter. Blackstone did not immediately comment.
In July, Sweden’s EQT said it expected to close its new Asia-focused buyout fund, hitting the maximum limit of $14.5 billion in 2026.
Mergers and acquisitions by private equity firms of Asian targets totalled $130 billion so far this year, already exceeding the annual amount in 2024 and the year before, Dealogic data showed.
RETURN TO CHINA
Hillhouse gained a reputation for early investments in Chinese tech giants, including JD.com and Tencent Holdings.
More recently, it struck several global buyout deals, including a $3.7 billion acquisition of Philips’ domestic appliances in 2021, the purchase of Australian medical researcher George Clinic in 2023 and a $1.1 billion buyout of Japan’s Samty Holdings last year.
Hillhouse’s latest fundraising comes as global investors warm up to China after staying on the sidelines over the last few years. Encouraged by cheaper valuations, some investors are reducing allocations to U.S. markets and reconsidering China.
“2025 broke the U.S. dominance in private capital markets,” said Benjamin Lohr, partner at Herbert Smith Freehills Kramer in Hong Kong.
“We’re seeing a global rebalancing, with capital reallocating to Europe and Asia. Appetite for China is growing again, and you can’t really raise a large Asia-focused fund without investing in China,” he added.
U.S. firms, including KKR & Co. and Warburg Pincus, have invested in China-focused businesses this year.
It was not immediately clear what Hillhouse’s next private equity fund, its sixth, will focus on, but the firm has traditionally been active in technology, business services, healthcare and consumer sectors.
Its co-chief operating officer told Reuters in March the firm was looking to invest $1 billion to $2 billion annually in Japan and roughly double its headcount in the country, which has been the biggest driver in Asia private equity activity.
Reuters
