Chinese conglomerate buying private banks
(10 September 2015 – Hong Kong) Fosun International Ltd., the Chinese conglomerate best known for acquiring Club Med, is now targeting private banks according to reports.
The Shanghai based company is in the process of buying German private bank Hauck & Aufhauser for US$233 million (A$334.7 milion), with the deal currently awaiting approval from the German regulator.
In an interview with Wall Street Journal, Fosun’s chief executive said the group is looking to buy even more assets that cater to China’s rich and wealthy people across Europe and Japan.
“We see that a lot of China’s middle class are looking for investments overseas and if we have private banks, we can offer wealthy Chinese families living in China direct access to personalised financial products that invest in overseas markets,” said Fosun Chief Executive Liang Xinjun.
Fosun has set aside a budget of US$1 billion to US$1.5 billion for each financial firm it is planning to buy.
Apart from cash and bank loans, Fosun uses the premiums it gets from the insurance companies it has acquired in recent years as cheap and long-term investing capital, a model championed by Warren Buffett’s Berkshire Hathaway.
“We think assets in our asset-management business, which include private banking, could reach US$100 billion in the next few years from around US$7.8 billion at present, through acquisitions and organic growth,” Liang said.
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