Millennium and Jane Street enter the market, top global investors return to the Hong Kong IPO market

After three years of silence, the Hong Kong Initial Public Offering (IPO) market is experiencing a strong recovery, attracting top global investment institutions, including Millennium Management and Jane Street Group, to return as cornerstone investors, injecting crucial confidence and momentum into the market.

According to Dealogic data, hedge fund giant Millennium Management LLC, quantitative trading firm Jane Street Group, and asset management company M&G Investments Ltd. have all served as cornerstone investors in Hong Kong IPOs this year, marking the first time in at least a decade that they have played this role. This shift signifies a reassessment of global capital regarding Hong Kong's prospects as an international financial center.

The return of these top investors coincides with the Hong Kong IPO market reaching a four-year high in fundraising. After previous doubts about whether the Chinese market was still worth investing in, this year's strong rebound is reigniting optimism in the market. According to Bloomberg data, the total fundraising amount for new stock listings in Hong Kong has reached USD 33.7 billion so far this year, three times last year's USD 11.2 billion.

Cornerstone investors receive a predetermined allocation of shares in an IPO and commit to holding these shares during a lock-up period (typically six months in Hong Kong). Unlike regular subscriptions, the participation of cornerstone investors is publicly disclosed, which not only enhances the image of the listed company but also demonstrates the strength and vision of the investment institutions.

Strong Recovery of the IPO Market

Data shows that the Hong Kong IPO market experienced a decisive rebound in 2025. According to Bloomberg data, as of December 5, the total fundraising for new stock listings in Hong Kong this year has reached USD 33.7 billion, significantly higher than USD 11.2 billion during the same period last year.

The market's enthusiasm is reflected not only in the fundraising amounts but also in the strong performance of new stocks in the secondary market. On a weighted basis by issuance scale, the stock prices of new listings this year have averaged a 47% increase compared to their issue prices. This series of positive data collectively forms a strong backdrop that attracts global investors back.

Top Institutions Entering the Market

Globally renowned investment institutions are actively participating in this recovery. London-based M&G Investments invested USD 60 million in March this year, becoming a cornerstone investor in the milk tea chain Mixue Group's IPO, marking the company's first cornerstone investment in the Asia-Pacific region.

M&G's deputy fund manager Jamie Zhou stated, "This is 'true love' in the capitalist sense; you want to build a long-term relationship with the company you invest in." He revealed that even after the lock-up period ended in September, M&G continued to hold shares in Mixue Group.

This week, M&G made another move, committing to purchase USD 85 million worth of shares in Jingdong Industrials Inc., a supply chain technology company under JD.com, becoming the largest cornerstone investor in the transaction Other large institutions are also following suit. UK-based Schroders Plc participated in the $1.4 billion IPO of Zhejiang Sanhua Intelligent Control Co., Ltd., a refrigerator parts manufacturer, in June, marking its first time as a cornerstone investor in Hong Kong in at least a decade. In September, Schroders again invested as a cornerstone in the IPO of Zijin Gold International Co. Keiko Kondo, Head of Multi-Asset Investment at Schroders Asia, stated that IPOs "remain an area where we find opportunities," noting that listings in Hong Kong are one way for investors to gain exposure to the mainland Chinese market.

New York-based Millennium, led by billionaire Izzy Englander, became a cornerstone investor in the $1.5 billion IPO of Jiangsu Hengrui Medicine Co., Ltd. in May, with the stock soaring over 60% post-listing.

Additionally, according to exchange documents, Jane Street also participated as a cornerstone investor in the listings of Sanhua Holdings, hygiene products company Softcare Ltd., and coconut water company IFBH Ltd.

"Double Dipping" Rule Enhances Flexibility

According to trading intermediaries, a key factor driving institutions to eagerly become cornerstone investors is a rule adjustment introduced by the Hong Kong Stock Exchange in 2023. This rule allows cornerstone investors, under certain circumstances, to subscribe to the main order in the public offering, known as "double dipping."

This rule provides investors with greater flexibility. Even if their cornerstone investment shares are locked up, they still have the opportunity to gain short-term profits through shares subscribed in the main order when the stock price rises. Exchange documents show that Jane Street, Millennium, and Schroders all received allocations in the main order through affiliates in their transactions as cornerstone investors.

Peihao Huang, Head of Equity Capital Markets for Asia Pacific at JP Morgan, stated that this rule also facilitates "long-only" investors, as these funds typically operate multiple sub-funds with different strategies. "This makes it much easier for long-term investors with multiple sub-funds and different decision-makers," Huang said.

Future Listing Pipeline Remains Abundant

Looking ahead, the Hong Kong market is expected to provide ample opportunities for cornerstone investors. According to the latest statistics from the Hong Kong Stock Exchange, approximately 300 companies are waiting to go public.

Insiders indicate that potential heavyweight listing projects include Syngenta Group, a Chinese agricultural technology company, A.S. Watson Group, a health and beauty retailer, and Zhongji Innolight Co., a manufacturer of optical communication modules. Additionally, pig farming company Muyuan Foods Co. and beverage manufacturer Eastroc Beverage Group Co. are also on the list Recently, it has also received approval from Chinese securities regulatory authorities to list in Hong Kong.

Although the listing pipeline is becoming increasingly crowded and the types of companies are more diverse, investors are becoming more selective. Zhou from M&G stated that he has turned down some deals that are overvalued or lack fundamental appeal. "We will only participate when we have confidence in both the fundamentals and the valuation," he emphasized