Mainland private equity firm Hillhouse Capital is continuing to build out its real estate capabilities as the company recently welcomed a former Blackstone managing director to its property investment team.
Yan Yan, who left Blackstone in late 2020 after a two-year stint with the property investment giant, has joined Hillhouse as a strategic advisor based in Beijing, according to an internal company memo seen by Mingtiandi.
Yan’s recruitment comes after Hillhouse was reported in November to be in talks regarding a buyout of Soho China, although the private equity firm has denied that such talks exist and Soho has dismissed the reports as rumours. Yan was an employee of Soho for 22 years and held the rank of president before leaving the company for Blackstone in 2018.
In August, former Warburg Pincus managing director Joseph Gagnon reportedly joined Hillhouse to lead the firm’s establishment of a real estate investment division in the region.
Building a Real Estate Team
The Hillhouse memo did not specify Yan’s duties in her new role, which she undertook last week, according to an account by Reuters, although her duties are understood to focus on creating value from real estate assets after acquisition.
Hillhouse late last week in comments published in the mainland media firm denied that there is any connection between Yan’s new role and a potential privatisation of Soho China, and reaffirmed that the company is not pursuing such a strategy.
The fifteen-year-old firm is pursuing real estate deals through its New Infrastructure division, which focuses on investing in assets set to benefit from expansion of the new economy. Contacted by Mingtiandi, Hillhouse representatives declined to comment.
Formerly a manager with Yale’s endowment fund, Zhang Lei built Hillhouse into one of the mainland’s top venture capital firms through investments in Tencent, JD.com and other tech giants. In 2017, the company teamed up with GLP boss Ming Z Mei, China Vanke and Fang Fenglei’s Hopu Investment Management to lead the $12 billion buyout of Global Logistic Properties, now known as GLP. In addition to pursuing further opportunities in the logistics real estate sector, Hillhouse may also consider investments in data centres.
Moving to a New Shop
Yan’s departure from Blackstone came just a few months after Soho China had declared to the Hong Kong stock exchange that its discussions over a $4 billion buyout of the Beijing-based developer had been cancelled. Industry reports had tagged Blackstone as the suitor in that deal, which fell apart as the coronavirus racked commercial property values throughout the region in the first half of last year.
In addition to Yan’s departure, which was first rumoured in August of 2020, in September last year Blackstone’s head of real estate for China, Tim Wang, left the firm after a decade-long tenure.
Soho China’s share price has slid by more than 21 percent over the last year, although its stock has risen 3.46 percent in trading over the last five days.