By Sam Nussey and Miho Uranaka
TOKYO (Reuters) – Hillhouse Investment is looking to invest $1 billion to $2 billion annually in Japan and roughly double its headcount in the East Asian country, an executive at the firm told Reuters.
The asset manager has around $6 billion in dry powder in its $20.5 billion fifth fund series, said Co-Chief Operating Officer Adam Hornung. It also plans to raise a sixth buyout fund, he said.
“The Japanese market now has a tremendous number of opportunities that we think are coming around that maybe weren’t as available five or 10 years ago,” Hornung said.
Japan was long seen as a value trap with companies trading at subdued valuations. However, there is a push to improve governance which is encouraging asset sales and take-private transactions.
Recent years have seen Japan attract attention from investors including Warren Buffett, who has taken stakes in five trading companies and said in a letter last month that his firm Berkshire Hathaway will likely increase its exposure.
Hillhouse has been investing in Japan since 2009. It has hired 10 people in the country and aims to roughly double that by the end of 2025, Hornung said. The firm will relocate to dedicated office space in Tokyo’s Marunouchi business district from shared office space by mid-year.
Hires include Tomohiro Kikuta, a former partner at Bain Capital, and Wern-Yuen Tan, a former executive at PepsiCo.
Hillhouse was founded by China-born dealmaker Zhang Lei in 2005. It is known for its hedge fund and private equity investment and has also moved into real estate and private credit.
The asset manager is focusing on healthcare, business services, consumer businesses and advanced manufacturing. Its investments in Japan including real estate developer Samty Holdings and restaurant software business Dinii.
There are seven Japan deals in the pipeline, Hornung said.
“There’s a lot more … deal activity; companies are considering different types of transactions,” said Hornung.
(Reporting by Sam Nussey and Miho Uranaka; Editing by Christopher Cushing)
