Tencent, Hillhouse To Establish Joint Venture Investment Fund

Chinese Internet giant Tencent Holdings Limited is to establish a joint venture public investment fund with Asia-focused hedge fund Hillhouse Capital Management, according to Chinese media reports.

Tencent and Hillhouse Capital will each contribute 40% and 60% of the fund’s capital. It’s unclear how much capital the fund will try to raise.

Former investment director of China Southern Fund Management Co., Ltd., Qiu Guolu, will be the chairman of fund, and Hillhouse Capital’s founder Zhang Lei will be the fund’s general manager.

A representative of Tencent says the company does not comment on market speculations.

This is not the first time Tencent and Hillhouse Capital have worked together.

Last February, the two joined Indonesian media company MNC Media to establish a joint venture to tap into the social media market opportunities in Indonesia.

In March, Tencent agreed to acquire a 15% stake in Beijing-based e-commerce firm JD.com for US$214.7 million.

Hillhouse Capital’s Zhang Lei is reportedly a key figure driving Tencent’s investment in JD.com, which completed an IPO on the NASDAQ, raising a total of US$1.78 billion.

Hillhouse Capital is an early investor in JD.com. It held a 13% stake of JD.com before its IPO, and sold 9.568 million shares during the IPO.

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