Ed Note: This story was edited for factual accuracy on Nov. 6, 2023.
The Korean market has become more prominent on the radar of private equity firm Hillhouse Capital. According to investment banking sources on Nov. 1, Hillhouse Capital has launched a search for a Korean market expert for its Hong Kong-based offices. Hillhouse Capital is rumored to have extended feelers to numerous employees from major domestic investment banks and large private equity fund (PEF) management firms to fill the position.
Established in 2005, Hillhouse Capital is a global PEF headquartered in Singapore. Founder Lei Zhang has consistently held the position of Chief Investment Officer (CIO). The company maintains investment teams in five locations: Beijing, Singapore, Hong Kong, London, and New York. As of the end of last year, its assets under management (AUM) stood at approximately US$41.4 billion.
Hillhouse Capital has diversified its investments across various industries, including the internet, consumer goods, healthcare, and manufacturing. It made strategic equity investments in China’s Tencent and Baidu before these tech giants embarked on substantial growth trajectories, resulting in significant returns. In the South Korean market, Hillhouse Capital is well-known for its early investments in companies like Kurly, which provides overnight grocery delivery; Woowa Brothers, the operator of the country’s No. 1 food delivery service; Baedal Minjok (Baemin); and Krafton, which develops and distributes video games.
Hillhouse Capital seems to be looking to increase its investment in the South Korean market. In fact, it has been actively engaged in acquiring South Korean companies since the middle of this year. Presently, the firm is in the final stages of negotiations for the acquisition of SK eco prime, the leading biodiesel company in South Korea. The transaction price is estimated to be in the range of approximately 400 billion to 500 billion won (US$300.08 million to 375.09 million). The firm entrusted KB Kookmin Bank with the exclusive financial advisory role and has also completed the capital procurement. In June, Hillhouse Capital also invested approximately US$400 million in SK on by participating in the MBK Partners consortium. With the establishment of a Korea expert, it appears that there will be further acceleration in domestic corporate mergers and acquisitions.
An industry insider in the investment banking sector said, “Hillhouse Capital highly values the South Korean market due to its relatively active environment for buyout deals, which surpasses that of Japan or Australia. It also appreciates the proactive approach of South Korean companies in seeking new business opportunities.”