How to invest: mainly used to target Chinese enterprises in M & A
As Zhang Lei, founder of Hillhouse capital, said in a conversation with Su Shimin, chairman of Blackstone Group in April, the best investment opportunity is in China, right now, and now is the best opportunity to re position in China. It is understood that phase 5 of Hillhouse will mainly focus on new opportunities under the epidemic, especially opportunities in the Chinese market.
Since 2020, Hillhouse has made frequent moves to strengthen its position in China. On May 13, Hillhouse announced to invest 400 million yuan to participate in the fixed increase of A-share medical device company kailitai, and 2.3 billion yuan to win the fixed increase of kailaiying and sign a strategic cooperation agreement with it.
From the perspective of investment strategy, M & A will become the dominant strategy in phase 5.
The US dollar fund named after Hillhouse x fund is the flagship product of Hillhouse capital. Since 2014, Hillhouse capital has basically maintained the pace of establishing one flagship fund every two years. In 2014, Hillhouse capital established two phases, in 2016, Hillhouse capital established three phases and in 2018, Hillhouse capital established four phases.
In 2017, a consortium led by Hillhouse capital completed the privatization of Belle International, the first generation shoe king, with HK $53.1 billion. After that, Hillhouse capital, on the basis of respecting Belles original capabilities and genes, mobilized its digital capabilities to empower Belle, promoted the lean operation team to enter the factory, carry out informatization in the stores, broaden the e-commerce channels, and carried out a series of digital transformation and transformation for belle.
On October 10, 2019, taobo, a sports shoes and clothing retailer under the spin off of belle, which completed the digital reform, was listed on the Hong Kong stock exchange, and its share price rose on the first day of listing 8.82% , with a market value of over HK $57 billion, it has exceeded the amount of privatization of belle two years ago.
By virtue of this case, Hillhouse phase 4 US dollar fund has realized over raising, raising a total of US $10.6 billion, and has officially entered the ranks of top M & a funds.
In 2019, the investment in Gree Electric will make Hillhouse capital famous for its M & A investment. On December 2, 2019, Gree Electric announced that Hillhouse capital purchased 15% equity of Gree Electric for more than 40 billion yuan. After the completion of the transaction, Zhuhai Mingjun, with Hillhouse capital as the main participant, officially became the largest shareholder of Gree Electric. This is the latest and heaviest investment of Hillhouse capital in the real industry.
Some analysts say that the best way to do M & A in China is not necessarily the usual practice of overseas funds, that is, to buy companies that are undervalued by the market and obtain huge economic returns through cost reduction and Elite Governance. In China, we must fully respect the management, respect the unique culture of Chinese enterprises, understand the specific stage of industrial development, and then use the new retail mode, improve management efficiency and scientific and technological level, go to the market to increase, and get more market share through competition. Hillhouse is the same with Belle International and Gree Electric. It is expected that Hillhouse phase 5 will continue such a strategy in M & A.
What to invest: continuous warehouse adding biomedical
An analysis of the position of Hillhouse capital in the U.S. stocks at the end of the first quarter of 2020 announced by the securities and Exchange Commission on May 16 may reveal some clues.
According to the data, Hillhouse capital holds shares of 60 companies in the US, with a market value of more than 7.4 billion US dollars (equivalent to 52.5 billion yuan), 7.5% less than the market value of its position of 8.026 billion US dollars at the end of the fourth quarter of last year.
China equities still occupy a strong position. Among the top ten heavyweight stocks of Hillhouse, zhonggai shares occupy 7 seats, which are iqiyi, Baiji Shenzhou, Jingdong, tal, Alibaba, pinduoduo and Taibang biology. The total market value of the seven enterprises exceeds 3.38 billion US dollars, accounting for 45.6% of the total market value of Hillhouse capital. Analysts say this shows that Hillhouse still values the development potential of Chinese enterprises.
Zoom, which focuses on multi person video conference, jumped to the top position of Hillhead capital due to its share price rising by 115% in the first quarter. Zoom went to the capital market in April last year, while Hillhouse invested in zoom in 2014, and continued to increase in subsequent rounds of financing. Under the epidemic situation, video conferencing software has become a rigid demand for telecommuting, and the future development of zoom continues to be optimistic by the capital market.
Baiji Shenzhou continues to occupy the top three positions. In the high position portfolio, biotechnology and medical pharmaceutical enterprises have always been the key layout areas. According to the data, among the 60 stocks held by Hillhouse, the biomedical enterprises accounted for 29 seats, with a total market value of $2.276 billion, accounting for 30% of the total market value of Hillhouse.
Hillhouse entered a new biotech company, beam therapeutics, with a market value of $53.395 million as of the end of the first quarter. Beam therapeutics is a leader in the field of gene medicine. Hillhouse also increased its stake in innovative biopharmaceuticals in the first quarter, with a market value of $90.92 million as of the end of the first quarter. People close to Hillhouse said that biomedicine and medical devices have always been the key investment direction of Hillhouse, and it is expected that Hillhouse will continue to layout in the future. Data shows that up to now, Hillhouse has invested 160 enterprises in the global medical and health industry, including 100 local enterprises and 60 overseas enterprises. Source: editor in charge of Shanghai Securities News: Zhang Meiyu nf2100
Hillhouse entered a new biotech company, beam therapeutics, with a market value of $53.395 million as of the end of the first quarter. Beam therapeutics is a leader in the field of gene medicine. Hillhouse also increased its stake in innovative biopharmaceuticals in the first quarter, with a market value of $90.92 million as of the end of the first quarter.
People close to Hillhouse said that biomedicine and medical devices have always been the key investment direction of Hillhouse, and it is expected that Hillhouse will continue to layout in the future.
Data shows that up to now, Hillhouse has invested 160 enterprises in the global medical and health industry, including 100 local enterprises and 60 overseas enterprises.