Everbright to buy more overseas assets to become ’China’s Blackstone’
April 9, 2019 Category China News Round-up, Weekly
The financial services arm of China Everbright Group, one of the first state-owned conglomerates established in Hong Kong in 1983, is planning to enlarge its global portfolio and transform itself into an international private equity and asset management firm. “This year, we will continue to increase the percentage of foreign asset allocation in order to maintain steady growth. The strategy includes increasing investments through our funds and boosting our U.S. dollar denominated funds,” said Chen Shuang, Chief Executive of China Everbright, in an interview with the South China Morning Post.
Chen said he hopes to bring the ratio of assets invested overseas to 50% from its current level of below 40%, without citing the time frame. The fund had HKD143.5 billion under management as of December 2018, rising 11% year-on-year. Chen said he expected new investment opportunities to arise amid global economic uncertainties. China Everbright has 62 actively managed funds spanning real estate, health care, advanced technology and high-end manufacturing.
The firm is a backer of Terminus Technologies, a company which uses artificial intelligence and the internet of things for applications that include smart buildings, community services and public security. It is also the controlling shareholder in China Aircraft Leasing Group Holdings, an investor in artificial intelligence company SenseTime and a backer of electric car company Nio. Last year, a unit of China Everbright invested USD70 million in Iceland-based Artic Green Energy Corp, a renewable energy provider specializing in geothermal energy. Other investments last year include a 100% stake in Norwegian public transport operator Boreal Holding.
“We started allocating our assets overseas about five years ago. At the time, we noticed that valuation of assets in China had peaked, that implied asset values entering a downward cycle. That is a very important decision we have made and it proves we have made the right move,” Chen said. “We definitely hope that we will become an international asset manager like U.S. giant Blackstone Group,” said Chen, referring to the world’s largest investment firm, which has USD472 billion in assets under management. Against a backdrop of capital controls that restrict funds from leaving China, Chen said the company was able to raise USD1.5 billion last year from international investors. These funds will be earmarked for foreign asset acquisitions, the South China Morning Post reports.
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