As the nexus for Asia’s private equity market, Hong Kong facilitates the free flow of capital in and out of the city, linking the Chinese mainland and the world with its unique financial system.
China Everbright Ltd — one of the prominent Chinese enterprises established in Hong Kong — is a pioneer in China’s cross-border asset management industry.
“As the only mainland company listed in Hong Kong with alternative asset management as its core business, China Everbright Ltd has charted the course of connecting financial capital and industrial capital in its 22-year history in Hong Kong,” said Zhao Wei, executive director and CEO of China Everbright Ltd.
Zhao took over as CEL’s new CEO in May this year, bringing to the company his extensive experience in the financial industry. Prior to that, he was vice-president and chief financial officer of China Reinsurance Corporation.
“It’s the second time I’ve moved to Hong Kong, the first was during the financial crisis from 2006 to 2010,” Zhao recalled. “And time has brought great changes to the city.”
Hong Kong’s position as an international financial center has been further strengthened, and Chinese companies nowadays use Hong Kong as the springboard to go out leveraging on Hong Kong’s expertise in comprehensive professional services, he said.
“I’m happy to see Hong Kong catching up quickly in information technology and innovation, typically in financial and biological areas,” Zhao said.
The mounting uncertainties triggered by the global trade tensions have affected the market and various industries, and for the private equity business, it’s experiencing a downturn, he said. “It’s only when the tide goes out that we learn who’s been swimming naked,” In his view, only those that can stand the test of time and tribulations can stay competitive in the global marketplace.
Looking back on the 22 years as CEL grows with Hong Kong and the Chinese mainland, Zhao said the company has matured and emerged more confident, especially after two crises.
The 1997 Asian financial crisis battered Asian financial markets, as well as Hong Kong’s, in 1998. The year also marked one of the key transitions for CEL.
“Before the Asian financial crisis, CEL’s basic idea was to use investment-banking services as the driver to construct an integrated financial conglomerate overseas,” said Zhao.
However, having survived the bear market and the Asian financial crisis, CEL started to adjust its strategy with a shake-up.
“With a ‘bring in and go global’ strategy, the company positioned itself as a window to optimize asset allocation for the Chinese economy, and seek technology and industrial upgrades overseas. Meanwhile, the company also helps overseas investors enter the Chinese market” Zhao said.
“It’s also how we achieve our own development through integrating ourselves into the development of the country, and I think this will continue to be our path of development for the time being,” he added.
It was the 2008 financial crisis that pushed out some global enterprises like Lehman Brothers, which used to be the fourth-largest investment bank in the US, but brought opportunities to CEL.
Inspired by Lehman Brothers’ Chinese real-estate fund management platform ALAM Investment which may add value to CEL in exploring real estate fund markets, the company decisively took over the stressed ALAM and renamed it as “EBA Investments” after rounds of acquisitions, mergers and internal transformation.
“The most valuable assets we obtained from this business are the people, the team and their expertise in PE investment,” Zhao said. He believed that at the end of the day, the expertise and talents are what make one PE firm different from others.
As a private equity firm under CEL, EBA Investments pioneered the innovative “Private Equity Real Estate + Real Estate Investment Trust” (PERE + REITs) model and launched China’s first “PERE+REITs” product which laid a solid foundation for the market operation of international- standard, publicly offered REITs.
“From the opportunity funds, real-estate funds, to the venture capital funds and industry funds established by CEL, the company has gradually taken shape as China’s leading cross-border investment and asset management company,” Zhao said.
Zhao is adamant that CEL’s achievements have been due to its consistent attention paid to the needs of China and the implementation of national strategies. Besides, being based in Hong Kong, CEL identifies itself, standing right between Hong Kong and the Chinese mainland, in integrating the strengths from both sides, he said.
The past 22 years marked the epitome of China’s development, which had to do with seizing the opportunities of the big era and making the most out of it, Zhao said.
HONG KONG NEWS