Thursday, August 16, 2018
 
Columnist
Martin Hennecke

China overseas forays start to falter
 
14/02/2018
 
Overseas acquisitions by mainland enterprises are becoming a mixed bag, with Fosun International (0656) set to acquire a majority stake in Lanvin, France's oldest surviving couture label, while a Chinese insurer faces prospects of losing control of Waldorf Astoria to Blackstone Group LP, which previously sold the luxury hotel in New York to the insurance firm.

Fosun, which owns French leisure group Club Med and a stake in Italian luxury menswear firm Caruso, had been vying with Qatari investment fund Mayhoola, owner of Italy's Valentino, for control of Lanvin.

A Fosun subsidiary, Hong Kong-based reinsurer Peak Reinsurance Company, has sold a minority stake to a subsidiary of Prudential Financial.

The deal was achieved after Peak Re issued new shares, allowing Prudential Financial to take 13.1 percent of the reinsurer following the latter's investment in Peak Re. Fosun retains 86.9 percent of Peak Re.

Meanwhile, Blackstone Group, whose unit sold Waldorf Astoria at a record-setting price to Anbang Insurance Group Co, may soon get a chance to own the iconic landmark again. The US private equity firm has held initial discussions about bidding for Anbang Insurance Group Co assets in a sale overseen by the Chinese government. The assets include the Waldorf as well as Strategic Hotels & Resorts, which Blackstone sold to Anbang in 2016.

FWD Hong Kong said it has forged a partnership with Industrial and Commercial Bank of China (Asia). Under the partnership, FWD will provide life insurance and services including endowment insurance, universal life insurance, health and protection products to the clients of the mainland bank.

Meanwhile, research on global bancassurance strategies conducted by Finaccord show that establishing sales partnerships with leading banks is one of the best ways for insurance firms to expand internationally as the partnerships provide insurers with access to new customers using lenders' own brands.

A separate research by global property advisor Knight Frank ranked London as the world's most active commercial real estate investment market, attracting more overseas capital than any other global city.

It estimates that investors, with funds of about 46.1 billion pounds (HK$500.09 billion), are actively looking to invest in London this year. The amount is 11 percent higher from last year's level.

It said most investors are from the Greater China region, notably Hong Kong.

With yield in Hong Kong office premises at less than 2 percent, investors are being lured to London assets, where prime yields are about 4.25 percent.

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