Hillhouse Capital makes a big move! Its subsidiary funds are merged into one, forming a fund with a scale of over $15 billion.

``` Hillhouse Capital is undergoing its largest restructuring in years of its public market investment division, merging three funds into a powerful vehicle with at least $15 billion in assets. The move aims to streamline operations, making the division more nimble in responding to market changes. On November 17, according to Bloomberg, the core of this merger is the consolidation of three Hillhouse funds that invest in public markets: - **HHLR Fund**: Hillhouse’s oldest flagship fund, formerly known as the Gaoling Fund, which invests globally but holds most positions in Chinese companies listed in Hong Kong and the United States. - **HHLR CF Fund**: A pure long-only fund dedicated to investing in stocks listed within mainland China. - **TF-A Fund**: Also known as the HHLR Termed Fund, this fund began raising capital in the second half of 2023. It is a three-year “dislocation” fund aiming to capture opportunities in undervalued Chinese stocks. After the merger, Hillhouse founder Zhang Lei will continue to be deeply involved in investment management with Vivien Xu, head of public markets investments. In addition, a large portion of the new fund’s capital will come from Hillhouse partners. According to sources, this investment giant completed the merger this summer. The move comes as the Chinese stock market is strongly rebounding and is expected to help Hillhouse better seize market opportunities. Sources add that the final asset size of the merged fund is still being calculated, depending on investor retention and performance since the merger. This reflects Hillhouse's proactive adjustment of its investment structure after experiencing challenges in recent years. A Hillhouse representative declined to comment. So far this year, the MSCI China Index has risen over 33%. DeepSeek’s breakthroughs in artificial intelligence have reignited investor interest in Chinese stocks. At the same time, growing concerns over high valuations in the US stock market and the potential impact of tariff hikes have prompted capital to reassess the Chinese market. ## Coping with Asset Shrinkage and Pressure from Investor Outflows The restructuring comes amid multiple pressures facing Hillhouse. According to Bloomberg's calculation based on US SEC filings, as of the end of last year, the combined total assets of the three funds mentioned above was $18.4 billion, about half of what it was two years prior. Since 2021, Hillhouse has been under pressure due to the pandemic and geopolitical tensions. In the past, its investor list included top North American university endowments, pension funds, and foundations, but as geopolitical tensions have continued, some investors have withdrawn capital. For example, Texas Governor Greg Abbott in November last year banned state agencies from making new investments in China and ordered existing investments to be withdrawn "at the first feasible opportunity." By June 2024, Hillhouse had disappeared from the Texas Teachers Retirement Fund’s list of investment managers. This pension fund had invested in Hillhouse since 2018, with holdings of $495 million as of December 2020. However, people familiar with the matter have said that part of the decline in asset size is because investors shifted funds into Hillhouse’s separately managed accounts (SMAs). In addition, Hillhouse has some investment vehicles without US investors, which do not require US regulatory disclosure. Risk warning and Disclaimer The market carries risk, and investments should be made cautiously. This article does not constitute personal investment advice and does not take into account the specific investment goals, financial situation, or needs of any individual user. Users should consider whether any opinions, views, or conclusions herein apply to their particular circumstances. Investing based on this information is at your own risk. ```