Hillhouse said to target more than $3bn for new yuan-denominated fund

Hillhouse’s move underscores a revival in private equity fundraising momentum in Asia. (Reuters)
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Updated 19 September 2020

Hillhouse said to target more than $3bn for new yuan-denominated fund

  • The dollar fund, the firm’s fifth, will comprise about $1 billion for venture investment, $2.5 billion for growth-stage companies and the rest for buyout deals, said two of the people

HONG KONG: Private equity firm Hillhouse Capital Group is raising a fund targeting over 20 billion yuan ($3 billion), said people with knowledge of the matter, as it readies itself for opportunities offered by the eventual normalization of the Chinese economy.
Hillhouse formally began fundraising for its largest-ever yuan fund in recent months, said one of the people. It is unclear when the fundraising will close but typical time frames are six months to over a year. Details of the fund are reported here for the first time.
The move underscores a revival in private equity fundraising momentum in Asia, after new funds raised focusing on the region dropped to a seven-year low in the first half of the year, as buyout firms scrambled to pare exposure to virus-hit portfolios.
So far in July-September, only a little over $6 billion has been raised for Asia-focused funds, compared with the quarter’s five-year average of $46 billion, data from Preqin showed.
However, top private equity firms’ track record of landing big-ticket merger-and-acquisition deals and steady returns for their investors hunting yields in a low interest rate environment are helping to revive fundraising activity.

FASTFACT

In July to September, a little over $6 billion has been raised for Asia-focused funds, compared with the quarter’s five-year average of $46 billion.

Hillhouse is also raising what would be Asia’s largest US dollar-denominated fund targeting $13 billion, said separate people with knowledge of the matter.
The dollar fund, the firm’s fifth, will comprise about $1 billion for venture investment, $2.5 billion for growth-stage companies and the rest for buyout deals, said two of the people.
Hillhouse’s fundraising follows US-based KKR & Co, which has raised more than $11 billion for its latest Asia fund. Its target is $12.5 billion, sources have said. Founded in 2005 by Chinese rainmaker Zhang Lei with seed funding from a Yale University endowment, Hillhouse is known for early investments in Chinese tech giants.


Researchers say new model shows Turkish inflation well above official tally

Updated 22 October 2020

Researchers say new model shows Turkish inflation well above official tally

  • Since last year, opposition lawmakers have raised questions about the accuracy of official inflation data
  • Year-on-year inflation was 11.75% according to the official tally announced earlier this month

ISTANBUL: Turkish monthly inflation was more than triple the official rate in September, according to a new model developed by a group of academics and researchers based on more frequent data than the government statistics office.
Veysel Ulusoy, a professor at an Istanbul-based university and head of the independent Inflation Research Group (ENAG), said the model collects “several times more” price data than the official Turkish Statistical Institute (TUIK) tally, and is meant to complement it.
Since last year, opposition lawmakers have raised questions about the accuracy of official inflation data, arguing that the published rate was lower than the market realities.
According to ENAG’s first published finding, consumer prices in September rose 3.61% from the previous month, compared to TUIK’s calculation of 0.97% increase.
Year-on-year inflation was 11.75% according to the official tally announced earlier this month. ENAG has not yet published a year-on-year figure.
TUIK was not immediately available for comment.
“We observed price differences and volatility in almost all groups in the basket,” Ulusoy said in an interview. ENAG brings together academics from multiple Turkish universities.
“TUIK collects 550,000 prices for all the basket items in a month. ENAG calculations include several times more than that, constructing a richer set of data,” Ulusoy said.
Turkish annual inflation has remained in double digits this year despite a sharp economic contraction in the second quarter due to the coronavirus pandemic. High prices and a record low lira prompted the central bank to raise interest rates last month, and it is expected to hike again on Thursday.
The ENAG model can calculate inflation as frequently as every hour, meaning it can fill gaps for researchers and investors, Ulusoy said. It weighs items in the same way as TUIK, but excludes price data from health, education spending and alcoholic drinks.
The September calculation showed that school-related items had the most price spikes including computers, tablets and mobile phones, as well as children’s’ clothing and some agricultural goods.
Ulusoy said the ENAG model showed that tablets and computer prices were up more than 30% in September from August due to school reopenings, while TUIK put these items at around 4% month-on-month.
Last year opposition parties submitted parliamentary questions to Finance Minister Berat Albayrak over claims that TUIK tweaked inflation data for political reasons, claims dismissed as groundless by the head of the institute.