Meet Wu Xiaohui – the man behind Anbang’s big bang from no-name to heavy hitter
The troubled tycoon is a member of the nouveau riche who amassed huge wealth by taking advantage of his ties with those in power
Anbang Insurance chairman Wu Xiaohui has been one of the most aggressive buyers of property in the United States.
He bought the Waldorf Astoria hotel in New York for US$1.95 billion in 2014, was involved in a high-profile bidding war for Starwood Hotels last year, and has had talks with Jared Kushner, the son-in-law of US President Donald Trump, about buying into a skyscraper project in Manhattan.
On the mainland, the tycoon was known for his ties to the country’s most powerful families, including his marriage to a granddaughter of late paramount leader Deng Xiaoping.
In recent weeks, Wu, 50, had been embroiled in a war of words with influential mainland magazine Caixin and its editor-in-chief Hu Shuli over allegations of irregularities in Wu’s US$300 billion business empire.
There had been rumours for some time that Wu was in trouble, but Anbang repeatedly denied the speculation. On Tuesday night, Caijing, another Chinese- language magazine, reported that Wu had been taken away for investigation. Just hours later, Anbang said in a brief statement that Wu could not perform his duties “for personal reasons” and other executives would take over in his stead.
Anbang emerged from a no-name property insurer to one of the biggest players in the country’s insurance market, taking in 5.3 per cent of the mainland’s total insurance premiums last year. The group is known for its ties to influential figures in Beijing as well as on Wall Street.
Wu’s rapid rise and dramatic fall are a product of the murky intersection of business and politics on the mainland.
Like Xiao Jianhua, another tycoon taken away this year to help with investigations on the mainland, Wu is a member of the nouveau riche who amassed huge wealth by taking advantage of his ties with those in power.
But that security was also a vulnerability as political winds changed in Beijing. Tycoons like Wu and Xiao found themselves in the cross hairs as President Xi Jinping and his political ally Wang Qishan took aim at corruption in the financial system.
“Amid the glamourous outbound deals and the rapid rise of the insurer in just 13 years, there’s a big question worth asking: where does the seemingly ceaseless flow of money come from?” Hu Xingdou, an economist with the Beijing Institute of Technology, said.
“People have reason to ask if it’s another example of collusion between officials and businessmen, which is rampant in China’s distorted market economy.”
In addition to its links to Deng’s family, Anbang is also partly owned by Chen Xiaolu, a son of Chen Yi, a founding father of the people’s republic.
One of Anbang’s most recent offshore forays was its purchase last year of a string of US luxury hotels for more than US$6 billion from the Blackstone Group. Blackstone chairman and chief executive Stephen Schwarzman now heads Trump’s business advisory council. During a forum at Harvard University in 2015, Wu described Schwarzman as “a good friend”.
Anbang also tried to buy US insurer Fidelity & Guaranty Life but the deal was called off because Anbang could not answer detailed questions on its shareholding structure raised by US financial regulators.
“Wu appeared to be sanguine and cordial, talkative and can express his ideas clearly. Maybe that’s why he’s liked and trusted by his consignors,” an investment banker who met Wu many times said. “Call it confidence or flamboyance, when he talks he tries to deliver the message that he can get things done with ease.”
Born in a village in Pingyang county, Wenzhou in Zhejiang province, Wu worked in the county’s industry and commerce administration. He went on to start a car dealership before creating Anbang in 2004.
According to its annual reports, Anbang Life, the group’s life insurance arm, had 1.45 trillion yuan (HK$1.66 trillion) of assets at the end of 2016, 60 per cent of which were offshore. “All of our overseas subsidiaries made profits,” Wu told The Beijing News in a rare interview on April 26. “It shows the improvement we’ve made in corporate management by using Chinese wisdom.”
But in May, the insurance regulator barred Anbang Life from issuing new products for three months, citing violations of rules governing short-term insurance products and disturbing market order.