03Media 2014.4.30 FOSUN TIMES

■ SHANGHAI -- Chinese private investment group Fosun is steadily building up its assets. After the purchase of three Portuguese insurers in January, its portfolio is valued at about $50 billion.

Guo Guangchang, Fosun's chairman, often says he aims to turn the company into a global investor with Chinese expertise. Guo follows the model of famed American investor Warren Buffett and is often regarded by the market as "China's Buffett."

Fosun International, which listed on the Main Board of Hong Kong Stock Exchange in 2007, saw its net profit for the year ended in December 2013 balloon to 5.52 billion yuan ($888 million), up 49% year-on-year.

Although Fosun is still dwarfed by Buffett's Berkshire Hathaway, it outperformed the Omaha-based conglomerate in terms of growth. Berkshire Hathaway's net profit rose 31% on the year to $19.4 billion last year.

Guo was profoundly influenced by Buffett in building his investment model, whereby Berkshire's profitable insurance business funds its other investments. When Fosun International closed the deal to buy the three big Portuguese insurers for 1 billion euro ($1.38 billion), he said, "This marks a solid step in Fosun's evolution toward Warren Buffett's model."

Fosun acquired 80% stakes in Fidelidade-Companhia de

Seguros, Multicare - Seguros de Saude, and Cares - Companhia de Seguros, all of which were wholly owned subsidiaries of Caixa Seguros e Saude, the insurance arm of a state-owned bank, Caixa Geral de Depositos. The insurers hold about 30% market share of the domestic market. All told, their investible assets are valued at roughly 12 billion euro.

He is now turning his eye toward Japan, recently setting up a division to identify investment opportunities in the country. He says increased economic exchange between China and Japan will benefit both because the two countries' economies are complementary. China's consumer market is the most promising part of its economy, Guo maintains, saying Japanese and Chinese have similar tastes. He sees this as a competitive advantage for Japanese companies operating in China.

Consumer products, such as food, and services such as healthcare and tourism are inviting investment targets in Japan, Guo says. He is also interested in real estate in Japan.■

■ Fosun Group, China’s largest privately-owned investment company by revenue, is riding China's economic growth to expand overseas.

In January Fosun announced its biggest overseas acquisition yet. It agreed to buy assets from Portugal's largest insurer for €1 billion ($1.36 billion).

"Fosun is set for a growth spurt and is similar to Berkshire Hathaway in its early days," Liang told FinanceAsia in March.

Fosun is still tiny in comparison but Liang thinks Fosun can improve on the Berkshire Hathaway model: "We [the management] are relatively younger in age; and we are willing to understand new technologies."

"In the past 20 years and the next 20 years to come, we have benefited and will continue to (benefit) from China's economic growth," said Liang.

The shares of Fosun International, the Hong Kong listed unit of the group, have surged 36.6% to HK$9.9 since January 10, the day the acquisition of Portugal's insurance assets was announced as its international profile grows and more analysts and investors start to track the company.

Mirroring China’s GrowthLast year Fosun had total assets of RMB 291billion ($47.5

billion) when including the Portuguese insurance assets.

"We entered the right industries at the right time," said Liang. In a new turn of events the Chinese government is actively

supporting privately-owned companies' expansion overseas. Fosun has also tapped into another big trend in China

urbanization. It has made five hive communities with a total 1.6 million square meters in Shanghai, Hainan and Wuhan.

The company also started accumulating insurance assets. It bought Xi'an-based Yong'an P&C Insurance in 2007 and then established Pramerica Fosun Life Insurance in 2012 and subsequently, Fosun and International Finance Corporation jointly set up Peak Reinsurance in Hong Kong and the Chinese company holds around 85% stake.

Home AdvantageFosun's natural advantage is helping foreign brands grow

in China. It supported Folli Follie's Chinese store expansion by four fold from 76 to 300 in two years. Club Med China generated only 2% of the group's global revenues before Fosun took two board seats. This year China is set to become its second largest market, according to Club Med's annual report.■

■Fosun has held a shareholding of 19.2% in the new BHF-Bank and the Kleinwort Group. Here, a German private bank with a traditional heritage, there, a rather young Chinese investment company – how do they fit together?

B e c a u s e w e h a v e t a k e n o v e r a n e x c e l l e n t management team here in Frankfurt and by working together we will be able to develop new opportunities for growth. This applies for the wealthy private clients of BHF-Bank on the one hand, and for the Chinese entrepreneurs on the other hand. With our assistance, BHF-Bank can become a bridge for German and Chinese entrepreneurs alike.

Fosun have recently also invested in insurance companies, for example in an insurance provider in Portugal . Are you expect ing synerg ies in cooperation with BHF-Bank?

The business with BHF-Bank has been audited for a total of two years, and at the beginning of the audit we had not yet planned to invest in Portugal. However, the fact is that it could probably well lead to the development of some joined-up products.

Why should entrepreneurs or investors who are interested in the Chinese market come to BHF-Bank and Fosun?

Very simple - Because we know Chinese industry and the China market inside out. We have holdings in a large number of companies. We have an in-depth understanding of China, as well as a global

scope.About BHF-Bank, it played a role in the listing

process of Fosun Pharma, a subsidiary of Fosun. This was a very good business deal for all those players involved – and therefore also for the bank and most importantly for the clients of BHF.

Do you get a sense of any resistance when you invest in companies or financial services providers abroad and particularly in Europe, or do you get a friendly reception?

We are received in a very fr iendly way. This i s c e r t a i n l y a l s o b e c a u s e w e a l w a y s m a k e a commitment as investors for the long term, we want to develop business with our links to China, and our p r imary conce rn i s no t abou t cu t t ing personnel and then getting out again quickly. We want to be very transparent, socially responsible and support the management team of our invested companies. ■

Nikkei published a series of articles both on its daily and

internet edition, introducing the growing path, business model and strategy of Fosun to Japan market.

Franffurter Allgemeine Zeitung Fur Deutschland, a German

author i ta t ive f inancial media , published a full-page story to explain Fosun’s business model by using the BHF-Bank deal.

FinanceAsia’s Exclusive Article for its April Issue is about Fosun's

transformation from a Chinese industrial conglomerate into a global investment group

Apprentice of Buffett thrives in China eyes Japan investment

China’s Warren Buffett Move Over Buffett - Fosun on Ambition to be China’s Berkshire Hathaway