[Editor’s note: The article has been amended post-publication for clarity.]

Hillhouse Investment has pledged to make a GP commitment of USD 1bn to its latest buyout fund, for which the manager is seeking USD 7bn-USD 8bn to make global investments while leveraging its Asia heritage, according to two sources familiar with the situation.

The firm has already started briefing prospective investors on its fundraising plans and a formal launch is expected in the coming weeks, with Asante Capital serving as placement agent, the sources said. Hillhouse and Asante both declined to comment.

The average GP commitment to private equity funds globally is around 3%, with the threshold broadly the same across funds of different sizes and in different locations, Investec noted in its 2024 Private Equity Trends report. This compares to 4.8% in 2021.

Internal contributions tend to be larger in Asian funds raised by global GPs, but the 12.5%-14.2% range envisioned by Hillhouse is significant by those standards. Employees and related parties committed 10.6% to Bain Capital’s fifth Asian fund, which closed last year on USD 7.1bn. KKR’s [NYSE:KKR] fourth pan-regional fund of USD 15bn, which closed in 2021, featured an 8.7% GP commitment.

Hillhouse is returning to market at a difficult time for fundraising globally, and Asia in particular. Commitments to Asia-focused funds, excluding renminbi-denominated vehicles, amounted to USD 37.7bn, according to AVCJ Research. This compares to USD 68.8bn in 2023 and USD 111.3bn in 2022.

The fortunes of global and pan-regional GPs correlate to their historical China exposure. Bain comfortably exceeded its target on the back of a Japan-heavy narrative, while EQT [STO:EQT], which has zero China investments in its eighth Asia fund, expects a first close on Fund IX – near to the overall target of USD 14.5bn – before July. China-centric groups like PAG have spent longer in the market.

Hillhouse closed its fourth private equity fund, which was positioned as global but with a focus on Asia, on USD 10.6bn in 2018. The following vintage was split into three, with targets of USD 9.5bn for buyout, USD 2.6bn for growth, and USD 1.5bn for venture.

These targets were subsequently revised upwards, with the growth vehicle closing on USD 5.2bn in 2021. The first source noted that approximately USD 18bn was raised across all three funds. The second source added that the buyout fund closed on about USD 11bn.

The launch of a distinct buyout strategy coincided with Hillhouse increasing focus on this type of transaction. A 2017 privatisation of China-based women’s footwear retailer Belle International [HKG:1880] proved successful – the company was split in two with both divisions listing in Hong Kong – and it was followed by a buyout of Chinese mattress brand AI Dream in 2021.

At the same time, Hillhouse has been pursuing more control deals outside of China. It bought Australia-based clinical trials business George Clinical in 2022, the fiduciary services business of global offshore law firm Harneys in 2023, and South Korean biofuels producer SK EcoPrime and Singapore-headquartered corporate solutions provider InCorp Global in 2024.

More recently, the firm made its Japan debut, securing a USD 1.1bn take-private of Japanese real estate operator Samty Holdings [TYO:187A].

LPs that disclosed their participation in Hillhouse Fund V include Canada Pension Plan Investment Board, San Franscisco Employees’ Retirement System, Texas County & District Retirement System, and Fubon Life Insurance, AVCJ Research’s records show.