Singapore-based Hillhouse plans to double India investments with real estate, data centres in focus

Global investment major Hillhouse Investments has deployed over $2 billion in India across real estate, private equity and credit, with its investments here approaching $4 billion in assets under management. The Singapore-based firm plans to double its India investments over the next 2-3 years, with real estate as a key focus.

Hillhouse sees data centres as a major long-term opportunity, with a separate co-investment pool and plans to build a full-stack platform in India, Joe Gagnon, co-head of Real Assets, Hillhouse Investments, and Siddhartha Gupta, founder, Alta Capital, tell Kailash Babar. Alta is the local partner of Hillhouse. Edited excerpts:

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Hillhouse has invested across technology, healthcare and consumer businesses globally. Why is real estate important to your India strategy?

Gagnon: We have always invested at the frontier of where demographics and technology are driving change. That creates disruption and opportunities to back a new generation of market leaders. It fits our growth-focused, partnership-driven approach of working with entrepreneurs to build businesses around long-term technological and demographic trends. We see real estate as a natural extension of that strategy.

India is particularly attractive because its real estate market is still at an earlier stage of development, with a limited number of large, specialised and listed real estate companies. Unlike mature markets such as the US, where investors can access large listed platforms in sectors such as warehousing and data centres, many such companies have yet to be created in India.

Where does India stand in your Asia play, and what has strengthened your confidence to invest more?

Gagnon: India is already our largest real estate market in Asia. About a third of our investments to date have been in India, with more than $1 billion of equity invested. Technology adoption, the emergence of GCCs, improving infrastructure, the maturation of the legal framework and greater ease of doing business have all strengthened our confidence. Ultimately, it comes down to people, growth and technology. We focus on 'new economy' infrastructure that directly supports India's macro growth drivers. We focus on long-term trends rather than trading assets.

Data centres appear to be a major focus. How large do you see the opportunity in India?

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Gupta: Data centres have a separate co-investment sleeve because the opportunity could require several billion dollars. India generates around 20% of global data but has only 2% to 3% of data centre capacity. With 1.5-2 GW today versus 35-50 GW in China, the runway is enormous. We believe there could be three to five significant players in these emerging sectors, and we want to be one of them.