China Minsheng joins Asia partners to tap Belt and Road investment opportunities

State owned enterprises and family offices keen on Belt and Road investment, industry insiders say

PUBLISHED : Monday, 01 May, 2017, 4:38pm
UPDATED : Tuesday, 02 May, 2017, 6:27pm

China Minsheng Investment Group (CMIG), the mainland’s largest non-state investment conglomerate, is teaming up with regional financial institutions to set up a new fund worth US$10-15 billion, to tap new economy business opportunities on China’s One Belt, One Road initiative route.

“CMIG will lead partners from the mainland, Hong Kong, Japan, South Korea, Southeast Asia and Israel, to explore investment opportunities under the Belt and Road Initiative, while the special formation of general partners coming from different markets will in turn create synergy between the invested projects,” said Calvin Choi, president of CMIG Hong Kong.

Health care, elderly support services, high tech, fintech and other emerging industries will be the investment targets of the new fund, Choi said.

Strategic partners of the new fund, which Choi said would turn into a general partnership when actual investment is made, include Japan based Orix Group, South Korea based Mirae Asset, Southeast Asia based IndoChina, and Israel based Cukierman & Co.

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Choi did not give a timetable for the first round of fund raising, but stressed capital was “sufficient”.

Eileen Zeng, director of Zhongtai International Capital, an east China’s Shandong provincial government backed financial institution, also a partner in the new fund, said a lot of their clients, mainly Shandong based state-owned enterprises (SOEs), “had large sums of money parked offshore that are keen to looking for investment opportunities”.

Private capital will be another important source of fund raising.

“Family offices in mainland and Hong Kong are particularly interested in fintech investment opportunities in Southeast Asia, which also falls into the Belt and Road Initiative,” said Lawrence Chu, founder and managing partner of BlackPine.

“We see successful business stories from the new economy sector in China, and that gives  people confidence that by learning from the technology while adapting to local markets in Southeast Asia, similar success could be replicated,” he said, adding that his company was in negotiations over investment in a payment company in Indonesia.

“It is something like Ant Financial in China. We like local traditional companies with good resources who can quickly pick up Chinese know-how in the new economy,” he noted.

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With a population of nearly 650 million, Asean, or the Association of Southeast Asian Nations, offers a market with an aggregate gross domestic product of US$2.5 trillion in 2016, making it collectively the third largest economy in Asia and the seventh in the world.

“Business can thrive in the markets if we integrate what has been proven works in more developed markets,” Choi says.

He agrees that promising businesses would attract fierce competition among investors, but based on CMIG’s network of members scattered across all industries, he could offer the invested targets better synergy and easier access to industry integration.

We like local traditional companies with good resources who can quickly pick up Chinese know-how in the new economy
Lawrence Chu, founder and managing partner of BlackPine

The founding members of CMIG, which has registered capital of 50 billion yuan (US$xxx) – include 59 non-state-owned companies, including Suning Commerce Group and real estate developer Yida Group.

CMIG’s chairman is Dong Wenbiao, former chairman of China Minsheng Banking Corporation.

An organisation called the Asia Institutional Investor Alliance (AIIA) was founded by CMIG in October in co-operation with investment banks including UBS, Citi and JP Morgan. The new fund will be working under the framework of AIIA.