Liang Xinjun takes a deep breath before discussing his recent victory against Italian financier Andrea Bonomi in the €958 million ($1 billion) battle for French resort operator Club Méditerranée. “We are happy to see this process has finally ended,” Liang, co-founder, vice chairman and CEO of Fosun Group, tells Institutional Investor during a recent meeting in Hong Kong.
China’s largest privately held investment conglomerate, Shanghai-based Fosun manages more than $50 billion worth of assets in industries ranging from insurance and steel to health care and real estate. Liang, whose fortune Forbes magazine puts at $3.2 billion, and Fosun chairman Guo Guangchang, who is worth an estimated $4.3 billion, fought a lengthy battle to acquire Club Med. Their winning offer of €24.60 a share was €0.60 higher than Bonomi’s last and marked the eighth bid for the resort chain since May 2013, when Guo and Liang drew first blood by offering €17 a share for the roughly 90 percent that Fosun didn’t already own.
Liang describes the deal — which was finalized in February but still needs regulatory approval from French authorities — as a “struggle.” At first he and Guo secured the backing of only Club Med’s management, but some employees reportedly sided with Bonomi. “We learned a lot from this experience,” says Liang, 47. “We will take the demands of workers and unions seriously as part of our merger and acquisition model in the future.”
The Club Med buyout caps a slew of acquisitions since Fosun broke out of its home market in 2010 by purchasing 7.1 percent of the Paris-based company for €23.38 million. It went on to acquire more than 20 foreign businesses. Last year alone, Fosun made some $5 billion in new investments, paying €1 billion for 80 percent of Portuguese insurer Caixa Seguros e Saúde and $433 million to buy out U.S.-based Meadowbrook Insurance Group. But those deals created less buzz than its $725 million acquisition of One Chase Manhattan Plaza, the 60-story global headquarters of JPMorgan Chase & Co., in October 2013.
Fosun was founded in 1992 by Gou, Liang and two other recent graduates of Shanghai’s Fudan University: Wang Qunbin, who is now president, and Fan Wei, who heads Shanghai Forte Land Co., its major real estate unit. The group has grown exponentially by emulating Warren Buffett, whose Berkshire Hathaway owns several U.S. insurers including GEICO and General Reinsurance Corp.
Insurers, which yield regular cash flow for new investments, remain high on Liang’s shopping list: “We can double or triple our insurance assets,” he says. Fosun’s recent foreign takeovers complement Pramerica Fosun Life Insurance, its existing insurance operation in China.
Last year about 82 percent of Fosun’s Portuguese insurance holdings were in real estate and other fixed assets, Liang notes, providing a valuable backstop for the group’s underwriting activities. “We believe we have absolute ability to improve the underwriting of many of our global insurers,” he says.
Looking ahead, Fosun will pursue what Liang calls a “1+1+1” strategy focused on three areas: insurance, pharmaceuticals and real estate. “We want to cater to the rising needs of an aging middle-class population and their need for better quality of life,” he says, adding that his company will target consumers worldwide. “In the coming ten years the growth will come primarily from China, but after that it may come from Indonesia or India. Whatever happens, Fosun will be ready to serve.”
