According to the Financial Times, Chinese investment firm Hongshan, which spun off from Sequoia Capital in 2023, is facing both “shrinking options” in China and a limited number of partners who have grown frustrated with Hongshan's slowness. As a result, it is actively expanding into Europe and North Asia. It leveraged $9 billion in capital commitments secured two years ago. (As the FT points out, LPs typically have to pay management fees on capital even if the capital is not used.)
The nearly 20-year-old Hong Kong-based company is taking a bigger bite out of existing Chinese portfolio companies such as TikTok parent company ByteDance and Instagram clone Xiaohongshu. It has also invested in robotics and AI startups based in China.
Still, reports of various new bets in new regions and plans to open an office in Tokyo suggest that Hongshan is seeking profits further afield. Indeed, the company, which recently opened an office in London, could increasingly come into conflict with its former partner Sequoia, which still has an office there, the FT observes.