After presiding over one of the world’s biggest strings of cross-border real estate transactions from 2015 to 2017, Anbang chairman Wu Xiaohui disappeared into detention in early June.
Now, some two months later the head of real estate for the company’s international division, whose role focused on overseas acquisitions, has left the Beijing-based insurer, according to sources who spoke with industry publication PERE.
Theo Cheng, who is currently on gardening leave, is leaving the firm amid a continuing clampdown on outbound investment by Chinese regulators that has seen Anbang singled out for attention over its debts and fund-raising practices.
Executive’s Term Coincided with $16B Deal Spree
Based in Hong Kong, the Chicago University graduate was responsible for Anbang’s real estate and real estate-related investments, with a focus on overseas deals. Cheng joined the Beijing-based firm in February 2015 after serving as senior vice president at Macquarie Group since 2011. His LinkedIn profile still lists Anbang International as his employer and no statement has been made regarding a new role for Cheng.
Cheng’s time at Anbang coincided with an aggressive outbound deal spree. Under chairman Wu Xiaohui, Anbang announced some $16 billion in overseas acquisitions in the 18-month period since October 2014, when the insurer announced its $1.95 billion purchase of the Waldorf Astoria New York hotel from Blackstone.
Anbang followed that up with an even bigger hospitality deal with Blackstone, picking up 15 properties of the 16-strong Strategic Hotels & Resorts portfolio in 2016 for around $5.5 billion. Other headline transactions include Anbang’s purchase of the Manhattan office tower 717 Fifth Ave for $415 million, Vancouver’s Bentall Centre for $730 million, and a Dutch office portfolio for around €487 million ($546.4 million).
The company also stunned the world when it walked away from a $14 billion all-cash offer for Marriott International’s Starwood Hotels and Resorts Worldwide in March 2016.
Anbang’s Deal Spree Ends with a Whimper
Anbang’s buying binge came to an end this year, as the China Insurance Regulatory Commission (CIRC) ramped up scrutiny of the company’s capital structure and controversial insurance products. Wu was detained by Chinese authorities June 9, leaving other executives to run the company in his absence.
Anbang’s real estate deal-making has fallen apart amid the ongoing scrutiny and a more general crackdown on a roster of acquisitive Chinese firms, as well as tighter cross-border capital controls. Last week, the central government issued new guidelines spelling out restrictions on outbound property investment.
According to the PERE report, Anbang has reached exclusive agreements on a number of real estate deals this year, but none of those transactions have gone through. Last month, Anbang dismissed media reports that Chinese authorities were pressuring the company to sell its more than $10 billion portfolio of overseas assets and bring the proceeds back home to the mainland.
Despite the ongoing uncertainties over Anbang’s leadership, the company has stated that its business and activities are all normal. The PERE report suggests that Anbang is now effectively run by the CIRC.