Wu Xiaohui (吳小暉) is Chairman and Chief Executive of Anbang Insurance Group, one of the largest insurers in China. He is married to Zhuo Ran, the granddaughter of Deng Xiaoping, the former Chinese paramount leader.
Over a ten-year period beginning with Anbang’s founding in 2004, Wu transformed the insurer from a minor player in China’s insurance market to a high-profile global investment firm. As of mid-March 2016, Anbang claims to have assets of RMB1.65 trillion, or about USD 253 billion. He is known for negotiating large transactions without the support of investment bankers, and according to the Financial Times “makes all the key decisions” for Anbang.
He is from rural Pingyang county near Wenzhou, a city in eastern Zhejiang province. He was born in 1966.
Behind Anbang’s dealmaking, a bold Buffett of China rises
by Hui-yong Yu and Sree Vidya Bhaktavatsalam
He is the would-be Buffett of Beijing: the man out to build a Berkshire Hathaway of China.
In just over a decade, Wu Xiaohui has transformed his company, Anbang Insurance Group, from an obscure player in China’s insurance industry into a juggernaut with global ambitions.
Now, Wu’s rapid rise is turning heads as China projects its money and influence around the world with new force.
In short order, Anbang has agreed to buy 16 luxury resorts in the US, including the landmark Hotel del Coronado near San Diego, California, and also launched a surprise bid for Starwood Hotels & Resorts Worldwide, owner of Sheraton, Westin and St Regis hotels. The combined price tag could approach $US20 billion ($26 billion).
It’s the latest move in a remarkable run for Wu, who first came to widespread attention outside China when Anbang bought New York’s famous Waldorf-Astoria hotel last year. His swift ascent – which China’s state media have likened to “the Warren Buffett model” of using insurance income to fund wider ambitions – underscores how China’s leaders are pushing to diversify the nation’s powerful state-owned enterprises. With the domestic economy slowing, China Inc is in the midst of a global buying spree that has begun to tip the balance of power in deal-making.
Anbang, founded in 2004, today ranks among the boldest actors in the game, and its pull extends beyond pure business. While many Chinese companies cultivate alliances with relatives of current and former senior officials, Anbang also has links to some of modern China’s most powerful families.
According to the online Caixin magazine, Wu formed ties with the family of Deng Xiaoping, one of China’s most revered leaders, after marrying Deng’s granddaughter. Anbang is also said to have links to the family of Chen Yi, a top military commander under Mao Zedong, as well as to the family of Zhu Rongji, China’s former premier.
So far, Wu, Anbang’s chairman and chief executive, has largely shut out global investment banks. He typically avoids turning to outside bankers, instead opting to negotiate some deals himself, according to people who have dealt with him. Right up until Anbang bought the Waldorf from Blackstone Group, for instance, Wu spoke personally to Tyler Henritze, a top Blackstone deal-maker, with a Blackstone employee serving as translator.
Anbang’s connections go beyond China’s first families, extending to some of its powerful state-owned enterprises. The company’s shareholders include SAIC Motor Corp, one of the few automakers in Mao’s China, and China Petroleum & Chemical Corp, China’s flagship energy company.
Anbang, which calls itself one of China’s largest insurance groups, started out in auto, property and casualty insurance before pushing into life insurance in 2010. As of 2013, it had just 0.1 per cent of the domestic life-insurance market.
Even before news of the latest deals hit, Wu was looking to branch out. Last November, Anbang agreed to buy HRG Group’s Fidelity & Guaranty Life for about $US1.6 billion in cash. Other recent purchases have included commercial real estate in the US and Canada; a stake in Minsheng Bank, China’s biggest private lender; Belgian insurer Fidea and Tongyang Life Insurance of South Korea.
With the Starwood approach, Wu is leading a group of investors against an earlier bid by Marriott International, which agreed to buy Starwood last November. Anbang teamed with investors including the private equity firm J.C. Flowers to offer $US76 a share in cash for Starwood, topping Marriott’s stock and cash bid. Marriott gave Starwood a week to hold talks with the Anbang group, calling the rival offer “highly conditional.”
If Anbang strikes a deal for Starwood, it would mark one of the largest acquisitions in the US by a Chinese company. Smithfield Foods, the world’s biggest pork producer, was sold to a Chinese company in 2013 for almost $US7 billion.
Chinese investors big and small have flocked to real estate in many major markets, from Vancouver and Sydney to San Francisco and New York. Hotels in particular are attracting strong interest as Chinese travel increases and domestic economic growth slows.
Wu, meantime, seems to be revelling in his company’s success. At a Harvard University recruitment event in January 2015, he told students that Anbang seeks to pay below book value for companies that generate a return on equity of more than 10 per cent, according to a transcript of his speech. He also talked about his friendship with Steve Schwarzman, the chief executive officer of Blackstone, his plans for deals around the globe – and the value of knowing how to say “ni hao”, a Chinese greeting that means hello.
His move into the US has prompted some subtle changes, too. Last year, China’s President Xi Jinping, stayed at the Waldorf during his first state visit. President Barack Obama has avoided the hotel since it fell into Chinese hands – breaking with a presidential tradition going back eight decades.
The Washington Post