Acquisition-Hungry Fosun Included In Key Hang Seng Index

Tom Burroughes

20 August 2019

Chinese conglomerate , which has acquired Western wealth management firms as part of its M&A strategy in recent years, is to be included in the Hang Seng China Enterprises Index, a major Hong Kong equities benchmark. The group will be included as of 9 September.

The move came after the Hang Seng Indexes Company reviewed its family of indices for the quarter ending 28 June.

The HSCEI serves as a benchmark of Hong Kong stock market that reflects the overall performance of Chinese companies listed in Hong Kong. Chinese private enterprises being included in HSCEI not only have to fulfill the general requirements in terms of the market capitalisation and turnover velocity, but also the selection criteria, such as the listing history requirement, price volatility, profit, net cash flow from operating activities and dividends. Other new HSCEI constituents are Want Want China, Geely Auto, China Taiping and Sunac China.

Fosun - founded in 1992 - holds a variety of firms across different sectors, including wealth managers and private banks. Its acquisition strategy involves buying Western wealth management businesses. In January this year it forged a strategic pact with UK-listed Standard Chartered. Last March, Fosun signed a co-operation pact with HSBC as part of its growth plans. As well as buying non-domestic wealth and asset management firms, it has also purchased Hauck & Aufhäuser, the venerable German private banking and financial firm.

In 2015 Fosun launched a financial platform for its investment and asset management business in Russia and neighbouring countries. However, not all of its bids have been successful; in 2015 it pulled out of an attempt to acquire BHF Kleinwort Benson. In November 2018 Fosun concluded its purchase of a 69.14 per cent stake of Guide Investimentos from Brazil's central bank. Fosun paid R$167.9 million ($45 million) for the business, and a further R$120 million that is dependent on how well the firm performs in future.

According to the 2018 annual report, Fosun International reached a total revenue of RMB109.4 billion, up by 24 per cent year-on-year. Profit attributable to owners of the parent stood at RMB13.4 billion.