Hillhouse seeking billions of dollars for China stocks

Hillhouse Capital Management Ltd is seeking to raise billions of dollars to invest in beaten-down Chinese stocks after this year's market rout, according to people with knowledge of the firm's deliberations.

Zhang Lei's more than $50 billion investment firm may raise about $4 billion to be split between its flagship Gaoling Fund and the Hillhouse China Value fund, said one of the people, who asked not to be named discussing private information. The overall fundraising amount could change, according to the people.

The Shanghai Composite Index has tumbled 28 percent since peaking in late January and now trades at just 12 times earnings, compared with a ratio of 16 for the S&P 500, data compiled by Bloomberg show.