Chinese billionaire Guo says 'vibrant' US economy entices him
Forty-eight-year-old billionaire and self-styled student of Warren Buffett is seeking health-care, tourism, commodities and fashion purchases
Chinese billionaire Guo Guangchang, who calls himself a student of Warren Buffett, says the stronger US dollar and his nation's slowing economy are not deterring him from investing in the United States or at home.
The 48-year-old founder and chairman of Fosun Group, which owns Club Mediterranee and recently bought a stake in Cirque du Soleil, is seeking health-care, tourism, commodities and fashion purchases.
The US market is "vibrant" and Fosun has "many deals" under discussion, even after asset prices went up "a lot", Guo said in an interview.
"We are certainly interested in good assets, but we'll be more careful.
"It's very hard to find attractive property deals compared with two years ago."
Fosun, China's largest closely held conglomerate, has spent almost US$25 billion on purchases abroad since 2010, data showed. Deals include French resort operator Club Med and Raffaele Caruso, an Italian maker of US$3,300 men's suits. It also bought 60-story One Chase Manhattan Plaza in New York, which it renamed 28 Liberty and uses as its US head office.
While real estate prices have surged since Fosun bought the tower from JPMorgan Chase in 2013, they still have room to increase, Guo said, citing the "attractive" US economy and immigration policies. Guo, wearing a Caruso suit, said he visits the US three or four times a year.
Commercial property in the US is breaking records set during the boom in 2007, topping pre-crisis peak worth by about 7 per cent, according to an index from Moody's Investors Service and Real Capital Analytics. The rebound is led by big cities like New York and San Francisco, where top-tier buildings' values are 22 per cent above the last peak.
Fosun is interested both in trophy properties in major cities and tourism-related properties that fit with its strategy for Club Med, Guo said.
"Be fearful when others are greedy and greedy when others are fearful," said Guo, citing Buffett. He said he is not concerned about the slowing economy in China, where first-quarter growth slipped to 7 per cent, the weakest pace since 2009.
While China's economy has entered a "new normal", it is still a big engine of global growth, Guo said. He said his investment philosophy is to combine China's growth with the world's resources. The company will also "definitely" invest in more insurance companies in Europe and the US in the coming two years, Guo said.
The "size" of his next target insurer will be similar to Cia de Seguros Fidelidade, a unit of Portugal's Caixa Geral de Depositos, which Hong Kong-listed unit Fosun International bought 80 per cent of last year, Guo said. Fosun International offered US$433 million in December to buy Southfield, Michigan-based property-casualty-focused Meadowbrook Insurance Group, and agreed last year to buy a stake in Bermuda-based Ironshore.
The firm is also said to be looking at Bermuda-incorporated OneBeacon Insurance Group and weighing a bid for commercial property broker Cushman & Wakefield. Guo declined to comment on specific deals.
Guo's wealth has jumped by 81 per cent this year to US$7.8 billion, according to the Bloomberg Billionaires Index. His closely held Fosun Holdings controls Fosun International and Hong Kong- and Shanghai-listed drugmaker Shanghai Fosun Pharmaceutical.
Guo, who said he is effectively Fosun's chief investment officer and approves every deal himself, mimics Buffett's approach at Berkshire Hathaway as a value investor, taking large long-term stakes. "We are a loyal student of Buffett," Guo said. "But we are deeply rooted in China and we are much younger."