Gopher, Hillhouse back Huatai Securities' Hong Kong IPO

The brokerage is selling 1.4 billion H-shares priced at HK$20.68-24.80 apiece, which would generate proceeds of up to HK$34.7 billion. The cornerstone investors would account for between 8.24% and 50.88% of the offering, depending on how it is priced and whether or not underwriters exercise the over-allotment option, according to a filing.

Hillhouse's commitment is $200 million, most of which would come from its Gaoling Fund, which invests in public and private companies. This will translate into an approximately 1% stake in Huatai post-offering.

Gopher is also putting in $200 million. It is operating through Gopher Opportunity IV and also acting on behalf of Sequoia Gopher Fund, which appears to be some kind of joint venture vehicle established in collaboration with Sequoia Capital.

Huatai provides brokerage and wealth management, investment banking, asset management, and investment and trading services to individual, institutional and corporate clients. It ranked fourth among all securities firms in China last year in terms of total and net assets, according to Wind Info.

The company generated revenue of RMB15.7 billion ($2.5 billion) for the 12 months ended December 2014, up from RMB9.92 billion a year earlier. Net profit rose from RMB2.27 billion to RMB4.54 billion over the same period.

Hillhouse, which was founded in 2005 and received seed funding from the Yale University endowment, describes itself as a long-term, stage-agnostic fundamental equities investor that will back companies ranging from start-ups to established listed players. In addition to the Gaoling fund, the firm is said to have raised a $2 billion vehicle that will be deployed in global PE deals.

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• Topics
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• Hillhouse Capital Management
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