Hillhouse to up investment in S.Korea with new hires

Hillhouse Investment Management Ltd., one of the largest private equity firms in Asia, is set to create an investment team dedicated to the South Korean market as geopolitical and regulatory risks increase in China, the PE giant’s major market, banking sources said on Wednesday.

The PE firm is seeking a head, director and vice president who will be based in Hong Kong and manage investments in the Korean market, according to sources. It has spoken to many professionals in investment banks and asset management firms in Korea given its strong commitment to the market, sources added.

“Hillhouse recognizes that the Korean buyout market is more active than those of Japan and Australia, and that many Korean companies are seeking new growth drivers,” a banking source said.

Hillhouse was founded by Chairman Lei Zhang in 2005 with initial seed capital from a Yale University endowment. It operates home bases in Singapore, Hong Kong and Beijing with a primary focus on Asia and selective investments in North America and Europe. It was managing $70.7 billion in assets as of Sept. 1, 2022.

The firm is best known for its investments in Asia’s biggest startups like Tencent, Baidu, Grab and Magento and global accommodation booking app Airbnb.

Among Korean startups it has backed are grocery shopping and delivery platform Kurly Inc., food delivery app Woowa Brothers Corp. and game developer Krafton Inc.

Korea’s National Pension Service (NPS) tapped the investment firm in the third quarter of 2021 to manage the world’s third-largest pension fund’s global PE portfolio. 

Hillhouse is accelerating its investments in Korean companies. It seeks to buy SK EcoPrime Co., a leading biofuel manufacturer in the country, at 400 billion-500 billion won ($297.8 million-$372.3 million).

The PE manager has completed fundraising for the potential deal and is in the final stage of negotiations with Hahn & Co., which holds a controlling stake in the biofuel producer.

In June, Hillhouse invested $400 million in Korean battery maker SK On Co. through a consortium of BlackRock, Qatar Investment Authority and MBK Partners.

Hillhouse is cutting exposure to China this year due to the prolonged US-China trade war and regulatory uncertainty in the Asian country, and is seeking investment expansion in other markets for risk diversification, sources said.

Write to Ji-Eun Ha and Jun-Ho Cha at hazzys@hankyung.com


Jihyun Kim edited this article.