After three years of subdued activity, Hong Kong's initial public offering (IPO) market is staging a robust comeback, drawing heavyweight global investors like Millennium Management and Jane Street Group back into the fold. These firms are making high-profile appearances as cornerstone investors, injecting critical confidence and momentum into the market.

Data from Dealogic reveals that hedge fund giant Millennium Management LLC, quantitative trading firm Jane Street Group, and asset manager M&G Investments Ltd. have all taken on cornerstone investor roles in Hong Kong IPOs this year—marking their first such participation in at least a decade. This shift signals a global reassessment of Hong Kong's prospects as an international financial hub.

The return of these elite investors coincides with Hong Kong's IPO fundraising hitting a four-year high. Following earlier doubts about whether China's market remained investable, this year's strong rebound is reigniting optimism. Bloomberg-compiled data shows Hong Kong IPOs have raised $33.7 billion year-to-date, triple last year's $11.2 billion total.

Cornerstone investors receive predetermined share allocations in IPOs and commit to holding them through lock-up periods (typically six months in Hong Kong). Unlike regular subscriptions, their participation is publicly disclosed, enhancing both the issuer's profile and the investor's credibility.

**IPO Market Rebounds Strongly** Hong Kong's IPO market has staged a decisive recovery in 2025. As of December 5, new listings have raised $33.7 billion, far surpassing the $11.2 billion during the same period last year, per Bloomberg data.

The market's vigor extends beyond fundraising—secondary market performance has been equally impressive. On a size-weighted basis, this year's IPOs have averaged 47% gains over their offer prices, creating a compelling backdrop for global investors' return.

**Major Players Enter the Arena** Prominent institutions are actively joining this revival. London-based M&G Investments invested $60 million in March as a cornerstone investor for bubble tea chain Mixue Group's IPO—its first such investment in Asia Pacific.

"This is capitalism's version of 'true love'—you want to build long-term relationships with companies you invest in," said Jamie Zhou, M&G's deputy fund manager, noting the firm maintained its Mixue stake post-lockup. This week, M&G committed $85 million to JD.com's supply chain tech unit Jingdong Industrials Inc. as lead cornerstone.

Other heavyweights have followed suit. Schroders Plc participated in June's $1.4 billion listing of refrigerator component maker Zhejiang Sanhua Intelligent Controls Co.—its first Hong Kong cornerstone role in over a decade—before joining Zijin Gold International Co.'s September IPO. "IPOs remain an area where we find opportunities," said Schroders' Asia multi-asset head Keiko Kondo, highlighting Hong Kong listings as China exposure vehicles.

New York's Millennium, led by billionaire Izzy Englander, backed Chinese pharma firm Jiangsu Hengrui Medicine Co.'s $1.5 billion May IPO (now up 60+%). Meanwhile, exchange filings show Jane Street participated as cornerstone in Sanhua, Softcare Ltd., and IFBH Ltd.'s listings.

**"Double Dipping" Rule Boosts Flexibility** Dealmakers attribute part of this enthusiasm to a 2023 Hong Kong exchange rule change allowing cornerstone investors to also subscribe in the public offering's main tranche—known as "double dipping."

This provides added flexibility, letting investors capture short-term gains via main tranche shares even while cornerstone stakes are locked up. Filings show Jane Street, Millennium, and Schroders all secured main tranche allocations through affiliates in their cornerstone deals.

JPMorgan's Asia Pacific ECM head Peihao Huang noted the rule particularly benefits multi-strategy funds: "It makes life much easier for long-only investors with multiple sub-funds and decision-makers."

**Robust Pipeline Ahead** Looking forward, Hong Kong offers ample opportunities. The exchange reports ~300 companies in the listing queue, with potential mega-deals including Syngenta Group, A.S. Watson Group, and Zhongji Innolight Co. Muyuan Foods Co. and Eastroc Beverage Group Co. recently received China regulatory approval for Hong Kong listings.

Despite the crowded pipeline and diversifying sectors, investors are growing more selective. M&G's Zhou has passed on overvalued or fundamentally weak deals, stressing: "We only participate when confident in both fundamentals and valuation."