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The Uptake | Money Moves

Written by The Uptake Published on   2 mins read

Targeted investing in China’s shifting regulatory conditions.

Since late 2020, we’ve been following the regulatory changes for China’s tech sector and listed companies. Plenty of news covers the immediate outcomes—apps that were taken offline, slowed revenue, layoffs. One element is frequently left out of the discussion: how have these new developments changed how investors operate?

Some of the venture capitalists that KrASIA has spoken to recently have shared that their day-to-day affairs have been largely unaffected, particularly given that their investment horizon is several years.

In other words, the objective is to ride out the storm and, hopefully, come out beaming on the other side.

That’s an optimistic outlook, one that sidesteps our question. While the payoff may exist years down the road, course corrections may still be needed today.

36Kr Global’s research team unpacked Hillhouse Capital Group’s strategy under the current climate. The investment firm has identified three important sectors that it believes will yield immense profits while fortifying China’s economy. It is opting to write checks for the subsidiaries of its more advanced portfolio companies that have already gone public.

That is an approach that exposes Hillhouse to broader swathes of their target sectors, while shouldering lower risk because the firm is working with companies that it already has good relationships with. Specifically, Hillhouse is making investments in biomedicine, autonomous driving, and smart manufacturing.

The report by 36Kr Global’s research team includes examples of Hillhouse’s investments under this blueprint. It also explains the firm’s thesis as it looks into the future of China’s economy. Check out the report here.

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