Sea is following in the footsteps of internet behemoths SoftBank Group Corp. and Tencent Holdings Ltd. by creating a corporate investment arm as the company aims to deepen its offerings in gaming, e-commerce and digital financial services as well as look for new areas of growth. Tech giants are increasingly active in backing companies for better returns and generating synergy between portfolios and their main operations.
“Sea Capital will focus on identifying, partnering with, and investing in technology companies that share our vision of bettering the lives of consumers and small businesses through technology," Sea Chief Executive Officer Forrest Li said during a conference call late yesterday, adding the new unit will help support Sea’s long-term growth strategies. Sea itself was backed by Tencent.
Ma’s Composite team, a high profile hedge fund started in 2016, oversaw nearly $2 billion last year. Ma spent seven years with Hillhouse, the asset manager led by Yale University endowment alumnus Zhang Lei. Hillhouse invests in both listed and private companies, making its name with bets including Tencent and JD.com Inc. It has in recent years gravitated toward venture capital and private equity business.
Composite prides itself on the ability to make private investments. In 2016, it backed Zoox Inc., a California-based startup working on self-driving cars. It sold its stake in Sea in the third quarter last year, according to a U.S. regulatory filing. It began to return client money last year ahead of yesterday’s announcement.
Ma’s team will strengthen Sea’s “investment and capital allocation capability," Yanjun Wang, Sea’s chief corporate officer, said during the conference call. “We think it’s very important for a global internet company to have that capabilities in the longer run."