Singapore-founded global alternative asset manager Hillhouse is to take a majority interest in Sydney firm Barwon Investment Partners.
Barwon, which has around $3 billion in private capital assets under management, invests in healthcare property, real estate credit and private equity. The firm makes direct investments in the first two categories and invests in private equity through global funds that take stakes in listed private equity firms, providing exposure to private equity with liquidity.
Barwon was established about 20 years ago and employs around 50 investment professionals and support staff.
Announcing the agreement on 20 May, Hillhouse said the investment in Barwon would further strengthen its presence in the Asia Pacific real assets sector.
The investment will position Barwon to expand its capacity to originate, invest and scale across its existing strategies “while supporting the ongoing succession of Barwon’s partnership”, the firm said.
The involvement of Hillhouse, and its real assets business, Rava Partners, will bring global scale and access to long-term capital to Barwon. The firm will continue to be led by its current managing partners Tom Patrick, Jonathan Pullin and Peter Connors.
In a statement, the managing partners said: “Hillhouse’s investment will strengthen our business while preserving our team and client focus and ensuring long-term succession and continuity.”
Hillhouse partner and co-head of Rava Partners, Joseph Gagnon, said Barwon was a high-quality specialist business with a strong track record and deep sector expertise.
“This investment reflects Hillhouse’s global strategy of partnering with leading management teams to build and scale real asset platforms in markets where we see long term opportunity,” Gagnon said. “Australia is an important market within our Asia-Pacific portfolio, and Barwon provides a compelling opportunity to expand our footprint. We are focused on supporting the business to grow, while maintaining its investment philosophy, culture and alignment with clients.”
The Australian Competition and Consumer Commission (ACCC) has determined that the acquisition does not need its approval but the deal remains subject to Foreign Investment Review Board (FIRB) approval and other customary and regulatory conditions.
The Deakin Health Hub in Canberra and the Joondalup medical research centre in Perth are examples of Barwon’s asset-specific healthcare real estate investment strategies.
The Deakin property was previously an under-utilised government office building. Barwon invested to transform the building into a mental health health hospital and medical consulting precinct. According to Barwon, engagement with clinicians, disciplined operator selection and a deliberate strategy of mixing tenants repositioned and stablilised the asset within 12 months of completing the deal.
When Barwon first considered investing in the Joondalup facility, it was facing structural change with one tenant exiting and another requiring expansion. Early engagement enabled Barwon to coordinate an early surrender of an existing lease, the securing of a new 10-year lease and repositioning the asset as a fully-leased life sciences facility anchored by Linear Clinical Research.
Hillhouse was founded in 2005 by Lei Zhang with initial funding of $US20 million from the Yale University Foundation. Born in Henan province, China, Zhang had studied at Yale and worked as an intern at Yale Foundation.
By 2017, Hillhouse had made private equity acquisitions of around $US26 billion in the Asia region. Notable investments included a 2005 investment in WeChat operator Tencent Holdings and an early investment in Chinese ecommerce company JD.com which was listed on NASDAQ with a $26 billion valuation in May 2014.
In 2020, Hillhouse invested in Australian condom manufacturer Lifestyles Healthcare, which had been carved out of Ansell in 2017 and included Chinese condoms and sexual wellness products company Jissbon which Ansell had acquired in 2006.
Hillhouse has grown to be a leading global private alternative asset manager with around $US100 billion ($140 billion) in assets under management and offices around the world, including a presence in Sydney. Hillhouse investment strategies include buyout, real assets (Rava Partners) and private credit Elham Credit.
In 2024, The Wall Street Journal reported that Hillhouse had reduced its China staff and “removed explicit mentions of China from its website”.
Rava Partners invests in real assets in the Asia Pacific region. The firm focuses on growth sectors such as education, logistics and industrials, hospitality, life sciences and healthcare and digital infrastructure.
Image: Barwon managing partners Tom Patrick, Peter Connors and Jonathan Pullin.