Vancouver’s new property player has deep pockets - and a rich Chinese communist pedigree
Anbang Insurance, reported buyer of Vancouver’s Bentall Centre, is spending incredible amounts on foreign assets around the world
Anbang Insurance, the privately owned Chinese firm that was last week reported to have made one of Vancouver’s most significant real estate purchases in years, boasts global ambitions and astonishingly deep pockets.
The mix and the nature of these connections has chopped and changed, but they have reportedly included over the years the late paramount leader Deng Xiaoping’s granddaughter, who married Anbang chairman Wu Xiaohui; a son of the revered military commander Marshal Chen Yi; a son of former premier Zhu Rongzhi; and Long Yongtu himself, who spent 15 years engineering China’s accession to the WTO in 2001 as Beijing’s chief negotiator.
The Vancouver Sun and Financial Post last week reported that Anbang had bought a two-thirds stake in all four towers of downtown Vancouver’s Bentall Centre, held by Ivanhoe Cambridge, in a deal that valued the entire property at C$1 billion.
Despite being overshadowed in the insurance business by mega firms like Ping An and China Life, Anbang has become famous in China for its huge foreign plays. In 2014, it bought New York’s storied Waldorf Astoria hotel for US$1.95 billion, a price some saw as greatly overvalued.
Behind these foreign purchases is a vast pool of funds. According to the well-regarded Chinese investigative magazine Caixin, Anbang more than quintupled its registered capital in 2014, to 61.9 billion yuan (currently worth C$13billion).
Priced at C$1billion, the 1.5 million sq ft Bentall Towers 1-4 works out at about C$680 per existing square foot. If it turns out that that price covers only 66 per cent of the property, the valuation spikes to an unheard-of C$1,020 per square foot.
Yet even this latter valuation makes sense if we consider the thinking of Anbang’s chairman Wu.
In a forum for students at Harvard University in January 2015, Wu said that he considered the Waldorf purchase “very cheap” - when compared to prices in Beijing.
Who owns Anbang Insurance?
If Wu’s thinking on what constitutes good value is coupled with his publicly stated desire for Anbang and its subsidiaries to eventually go public with IPOs around the world, the firm’s foreign investment strategy becomes perfectly clear.
What is less than clear is who exactly owns Anbang.
In an interview with Caixin , Chen said that he had advised Wu to start spending overseas. “Now that you have money, you should not just put all the money in one basket. China’s economy is going downhill but the US economy is picking up. So, you should try to buy dollar assets,” he described himself telling Wu, who Caixin said had worked as a car salesman before joining one of Chen’s companies.
The report said Chen mumbled his way through an answer about his ownership stakes in a company with shareholdings in Anbang. Caixin later reported that Chen was listed as one of nine directors on Anbang’s board, according to its business registration. Nevertheless, Caixin concluded it was “certain”, that “Wu is the only person in charge of Anbang”.
Caixin continued to pursue the Anbang story, and a month later reported on the firm’s incredible growth in just over a decade, to the point that it held assets worth 1 trillion yuan.
“Most shareholders are small, obscure companies, including auto dealerships and mine operators. Most are registered in Chengdu, Shanghai, Shenzhen or Hangzhou,” Caixin reported.
“Some new shareholders share addresses. For example, registration documents show nine new investors registered their businesses in the southwestern city of Chengdu on the same day – December 10, 2012. Each held an initial shareholder meeting at the same venue. They also use the same accountants and bank.”
Caixin said that reports about Anbang’s links to relatives of Deng Xiaoping had prompted a meeting of the Deng clan in late 2014, at which it was concluded that the links did not exist.
Much of the fascination with the firm’s provenance is due to chairman Wu’s reported marriage to Deng’s granddaughter, Zhuo Ran, whose mother Deng Nan is a party heavyweight in her own right. Caixin said that Zhuo and Wu have a son, but the couple is believed to have separated.
The magazine reported that Zhuo had owned stakes in two of Anbang’s 2014 investors, but had sold these as of December that year.
Zhu Yunlai, the son of former Chinese premier Zhu Rongji, was meanwhile listed as director of Anpang, but Caixin reported a source as saying that he had actually declined an invitation to join the board. He had his name removed from the directors’ list in September 2014.
Another notable, Long Yongtu, “was one of the first directors on Anbang’s board until quitting in November 2013”, Caixin said.
Close connections between Chinese conglomerates and party figures and their families are not particularly unusual in China, something that Chen Xiaolu himself noted in his January 2015 WeChat comments.
“I’m like a platform, working with Wu,” said Chen. “That was the same as many veteran cadres invited to take part in certain activities. That’s what many ‘Second Generation Reds’ [children of the founding Communist Party fathers] would also do. They do not even need not be paid for doing that.”
*
The Hongcouver blog is devoted to the hybrid culture of its namesake cities: Hong Kong and Vancouver. All story ideas and comments are welcome. Connect with me by email [email protected] or on Twitter, @ianjamesyoung70 .