The blistering rebound in listings in the Hong Kong Special Administrative Region in 2025 has lured a wave of big names into the role of cornerstone investors.

Millennium Management LLC, Jane Street Group and M&G Investments Ltd are among the firms that have played the role of cornerstones in initial public offerings in the city this year. For all three, it’s the first time they have done so in at least a decade, based on data from Dealogic.

In 2025, some of the world’s largest investors has fueled what is set to be a four-year high in listing proceeds.

“It’s true love in the sense of capitalism,” said Jamie Zhou, a deputy fund manager at London-based M&G, who helped drive the firm’s first Asia-Pacific cornerstone role when it invested in bubble-tea chain Mixue Group’s IPO in March. “You want to have these long-term relationships with the companies you’re investing in.”

Share listings in the city have raised $33.7 billion so far in 2025, compared with $11.2 billion last year, according to data compiled by Bloomberg. The newly issued shares have climbed by an average of 47 percent from their offer price, weighted by the issue size, the data show.

A cornerstone investor gets a predetermined allocation of shares and must commit to hold them for a lock-up period, typically six months for listings in the HKSAR. These investments, unlike allotments during the regular course of an IPO, are publicly disclosed and if the deal is successful can raise the profiles of both the newly listed company and the investor.

Bubble tea

M&G bought $60 million of shares in the Hong Kong IPO of Mixue. Zhou said he decided to invest in the Chinese mainland company due to its strategy in keeping prices stable instead of rushing to widen profit margins as some of its competitors had done.

“We liked the company — we want to make a statement; and the company liked us in return — they are making a statement,” Zhou said. M&G still owns the shares even though the lock-up period expired in September. While down from their June highs, Mixue’s shares are still about 100 percent above their issue price, while the stock of some of its competitors have fallen.

M&G this week made another foray as a cornerstone in Asia Pacific when it promised to buy $85 million of shares in Jingdong Industrials Inc, the supply chain technology unit of JD. That makes it the biggest such investor in the deal.

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UK-based Schroders Plc entered its first HKSAR cornerstone position in a least a decade in the $1.4 billion listing of refrigerator-parts maker Zhejiang Sanhua Intelligent Controls Co in June. The money manager played a similar role in September in the debut of mining company Zijin Gold International Co, the world’s third-largest listing this year. The shares have both have risen from their offer prices.

IPOs are “still something that we do find as opportunity,” said Keiko Kondo, head of multi-asset investments for Asia at Schroders. HKSAR listings are among ways investors can gain exposure to the mainland market, she said.

Millennium, the New York-based firm led by billionaire Izzy Englander, took on a cornerstone position in the $1.5 billion listing of mainland drugmaker Jiangsu Hengrui Pharmaceuticals Co in May. The shares have surged more than 60 percent since their debut.

‘Double dipping’

One driver behind the rush of firms signing up for cornerstone positions, according to dealmakers, was a change introduced by the Hong Kong stock exchange in 2023 to allow such investors to also bid for shares in the main order book in some instances. This gives them the option to take profits if the stock price bounces, even as their other shares remain locked up.

An associate of Jane Street, which was a cornerstone in the listings of Sanhua, hygiene-products company Softcare Ltd and coconut-water firm IFBH Ltd, also received allocations in those deals’ main order books, according to stock exchange filings. Millennium doubled dipped in Hengrui’s share sale, while Schroders also got allocations in the main books of Zijin Gold, electric-vehicle maker Seres Group Co and Sanhua, the filings showed.

A Schroders representative said the firm doesn’t comment on specific IPOs. Representatives for Jane Street and Millennium declined to comment.

The double-dipping rule also provides flexibility to so-called long-only investors, who often operate several sub funds that deploy different strategies, said Peihao Huang, head of Asia-Pacific equity capital markets at JPMorgan Chase & Co. Long-only funds generally invest in stocks they expect to rise while abstaining from short selling.

“It makes life much easier for long-only investors who have multiple sub-funds and different decision makers,” the HKSAR-based Huang said.

There is likely to be plenty of opportunities for new cornerstone investors in the HKSAR given there are about 300 firms waiting to list in the city, based on the stock exchange’s latest count.

Potentially heavyweight listings in the pipeline include mainland agricultural technology company Syngenta Group, health and beauty retailer A.S. Watson Group and optical communication module maker Zhongji Innolight Co, people familiar with the matter have said. Pig breeder Muyuan Foods Co and drinks maker Eastroc Beverage Group Co also recently got a green light from the nation's securities regulator to list shares in the HKSAR.

With the pipeline growing and the range of companies coming to the market becoming wider, M&G’s Zhou said he has become more selective. He has passed on deals where valuations looked stretched or fundamentals were less compelling.

“We will only participate where we have conviction in both the fundamentals and the valuation,” he said.