Hillhouse has put $2 billion into India. Now what?

Hillhouse Investments, a global investment firm, has committed over $2 billion to India across real estate, private equity, and credit. This investment has resulted in assets under management totaling nearly $4 billion. The Singapore-based company plans to double its investments in India over the next two to three years, with a strong focus on real estate.

Joe Gagnon, co-head of Real Assets at Hillhouse Investments, and Siddhartha Gupta, founder of Alta Capital, the local partner of Hillhouse, discussed the firm's India strategy. Gagnon explained that Hillhouse has continually invested at the forefront of technological and demographic change, identifying real estate as a natural extension of this growth-focused, partnership-driven approach.

India's real estate market is at an earlier stage of development compared to mature markets like the US, presenting numerous opportunities for investors. With a limited number of large, specialized, and listed real estate companies in India, the firm sees potential in building new market leaders. Gagnon highlighted that India is already the largest real estate market in Asia for Hillhouse, accounting for about a third of their total investments to date.

Factors such as technology adoption, the emergence of global corporate headquarters, improving infrastructure, and the maturation of the legal framework have bolstered the firm's confidence in investing more in India. Data centers are a significant focus for Hillhouse in India, as Gupta explained that the country generates around 20% of global data but has only 2% to 3% of data center capacity.

With a current capacity of 1.5-2 GW and a potential of 35-50 GW in China, the opportunities in India are substantial. The firm believes there could be three to five significant players in these emerging sectors, and they aim to be one of them.