China Life is ready to take actions
I am always feeling that in this financial crisis, some deep-pocket Chinese financial institutions are facing golden, or even once-in-life opportunities to spread business over the world. In the short term you may see some losses and corresponding slowdown in Chinese investment overseas, but I don’t think we should all close our doors because of the risks.
China Life, the world’s largest life assurer, is eyeing overseas acquisitions as it seeks to take advantage of the global financial crisis to gain a foothold in foreign markets.
Liu Lefei, chief investment officer, said the crisis in financial markets was not yet over, but China Life believed the moment to begin making overseas investments was fast approaching. Mr Liu also said they were cautiously but actively looking for M&A opportunities. After doing a lot of research, the opportunities were becoming more and more obvious.
China Life has yet to make any overseas strategic investments, and its investment portfolio is also almost entirely domestic. As China’s largest insurer and a big institutional investor, they had Rmb30.5bn of cash on its balance sheet. So for a such well-funded Chinese financial group, the recent market chaos is seen as a window to make opportunistic investments.
Potential targets were more likely to be small or medium-sized financial groups and could be anywhere in the US, Asia and Europe. China Life has been mentioned as a potential buyer for parts of AIG’s Asia-Pacific business if the troubled insurance group puts the assets up for sale.
Chinese groups made a number of high-profile investments last year in overseas financial groups before the worst of the credit crisis hit the sector.
China Investment Corp bought stakes in Blackstone and Morgan Stanley, which have dropped sharply in value. Ping An made the first overseas investment by a Chinese insurer when it bought a 5 per cent stake in Fortis, which was later partly nationalized. The group booked a Rmb15.7bn ($2.3bn) loss on the Fortis investment.
Due to such big previous overseas investment loss, Chinese officials have signaled that big investments in overseas investment groups were now on hold. However, while there are apparently huge risks lurking in the way ahead, this provides at the same time huge investment opportunities.
China Life, the world’s largest life assurer, is eyeing overseas acquisitions as it seeks to take advantage of the global financial crisis to gain a foothold in foreign markets.
Liu Lefei, chief investment officer, said the crisis in financial markets was not yet over, but China Life believed the moment to begin making overseas investments was fast approaching. Mr Liu also said they were cautiously but actively looking for M&A opportunities. After doing a lot of research, the opportunities were becoming more and more obvious.
China Life has yet to make any overseas strategic investments, and its investment portfolio is also almost entirely domestic. As China’s largest insurer and a big institutional investor, they had Rmb30.5bn of cash on its balance sheet. So for a such well-funded Chinese financial group, the recent market chaos is seen as a window to make opportunistic investments.
Potential targets were more likely to be small or medium-sized financial groups and could be anywhere in the US, Asia and Europe. China Life has been mentioned as a potential buyer for parts of AIG’s Asia-Pacific business if the troubled insurance group puts the assets up for sale.
Chinese groups made a number of high-profile investments last year in overseas financial groups before the worst of the credit crisis hit the sector.
China Investment Corp bought stakes in Blackstone and Morgan Stanley, which have dropped sharply in value. Ping An made the first overseas investment by a Chinese insurer when it bought a 5 per cent stake in Fortis, which was later partly nationalized. The group booked a Rmb15.7bn ($2.3bn) loss on the Fortis investment.
Due to such big previous overseas investment loss, Chinese officials have signaled that big investments in overseas investment groups were now on hold. However, while there are apparently huge risks lurking in the way ahead, this provides at the same time huge investment opportunities.
posted by Jiu Zhuang at
10:28 AM
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