SK Group, Hillhouse Capital to form $850 mn fund to invest in Chinese start-ups

  • 2019-12-02

SK Group will set up a 1 trillion won ($850 million) fund with China’s private equity firm Hillhouse Capital Group to invest in Chinese start-ups which are expected to create synergy effects for the energy-to-telecom giant’s new and existing businesses.

Hillhouse Capital will ante up 900 billion won for the fund while the South Korean conglomerate’s Chinese holding company, SK China, will contribute the remaining 100 billion won, according to sources with knowledge of the matter on Dec. 1.

“The partnership with Hillhouse, which owns China’s largest private equity firm and venture capital firm, will give SK Group a strong foothold in China’s investment market,” said one of the sources.

SK China’s board recently approved of the fund launch.

The Korean business group has established investment funds with the country’s banking groups to invest in domestic start-ups since 2017.

In September, it launched a $1 billion fund with the Korean Teachers’ Credit Union to make cross-border investments in high-growth businesses ranging from biotech, pharmaceuticals and semiconductor materials to renewable energy sectors.

Hillhouse Capital, with over $50 billion under management, has invested in the US ride-hailing company Uber and top Chinese tech companies, including Tencent Holdings Ltd., Baidu Inc. and ecommerce giant JD.com.

In South Korea, it made a joint investment of $320 million in the food delivery app Baedal Minjok with Singapore’s GIC, Sequoia Capital and other investors last December.

In May, Hillhouse invested 35 billion ($30 million) in Market Kurly, a Korean online grocery delivery start-up.

Those South Korean investments came after it raised $10.6 billion for a new fund in September 2018 in Asia’s biggest private equity capital raising.

By Chaeyon Kim and Hugh YH Jeong

hugh@hankyung.com

<Edited by Yeonhee Kim>

(Photo: Getty Images Bank)