Hillhouse Capital Said to Raise $2 Billion Private Equity Fund

Hillhouse Capital Management, backed by the Yale University endowment, is stepping up its global private-equity investments with a new $2 billion fund, a person with knowledge of the matter said.

Hillhouse sought funding only from its existing investors, said the person, who didn’t identify the participants in the new fund.

The new private equity fund and gains in existing holdings have boosted Hillhouse’s assets under management to about $18 billion, from more than $14 billion in June, said the person, who asked not to be identified as the information is private. In the past, Hillhouse has returned capital to investors in order to manage its asset size.

Hillhouse has previously made private equity investments out of its main Gaoling Fund, which holds a mix of publicly traded and closely held investments. Wu Xiaoning, a director in charge of investor relations at Hillhouse, declined to comment.

The new fund will be used to invest in a venture with the Rochester, Minnesota-based Mayo Clinic, which will seek out projects that raise medical care standards in China. Details of the venture will be announced on Wednesday, Hillhouse founder and Chief Executive Officer Zhang Lei told a financial forum in Hong Kong yesterday.

“We are an entrepreneur who just so happens to be an investor,” Zhang said in Hong Kong yesterday. “China’s health care is bound for rapid growth because of economic growth and an aging society. And people are dissatisfied with Chinese health-care services.”

Zhang founded Hillhouse in 2005 with $30 million from Yale University endowment. Hillhouse, which has offices in Beijing, Hong Kong and Singapore, is a fundamental equity manager that invests in publicly-traded and privately-held companies both in and outside China. Its investors include university endowments, hospital foundations and sovereign wealth funds.

Among its longstanding investments are Tencent Holdings Ltd., Asia’s second-biggest Internet company, and JD.com Inc., China’s second-largest e-commerce operator.

Hillhouse invested in a company linked to BeiGene (Beijing) Co., a bio-technology company based in the Chinese capital that is developing immune-oncology therapies for cancer, according to a November statement.

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