One week after Anbang abandoned its $14 billion bid for Starwood amidst a storm of speculation and investigation, Ping An Insurance Group took the opportunity to cast itself in a new light: as the anti-Anbang.
In an interview with the South China Morning Post, Lee Yuansiong, Ping An Insurance Group’s Executive Director and Chief Insurance Business Officer, portrayed the company’s international strategy as a conservative counterpoint to Anbang’s swashbuckling entrance into global markets. Though Ping An made a splash in recent years with nearly two billion dollars of acquisitions in London and the US, Lee sought to draw a stark contrast between Ping An and the insurance giant from Anbang in terms of the scale and the nature of its investments overseas.
Ping An Says It’s Heading Overseas Slowly
In terms of scale, Lee emphasized that Ping An has invested less than 2 percent of its assets abroad, well below the 15 percent cap that Chinese regulators placed on overseas investments by insurance companies. Lee said that percentage for Ping An will likely stay in single digits even as the company expands its overseas portfolio.
In the middle of Anbang’s furious bidding war for Starwood Hotels and Resort Worldwide, media reports indicated that Chinese insurance regulators were prepared to block the takeover because it would push Anbang over the 15 percent cap. Though it’s unclear whether those threats played a decisive role in ending Anbang’s bid — and the company offered one final bid even after reports of regulatory issued surfaced — Ping An’s Lee appeared to be signalling to regulators that the company intended to play by the rules.
Describing Ping An’s target industries overseas, Lee played up the company’s major investments in logistics real estate. Last October, Ping An announced a joint venture of up to $1 billion in warehouse real estate with Denver-based Blumberg Investment Partners. Ping An has already committed $600 million toward the warehouse investment platform, with an additional $400 million in deals already identified.
Cautious Compared to Anbang
Lee told SCMP that Ping An had no interest in the hotel industry or in taking over management of the company’s overseas acquisitions. He said that the company is instead seeking out partners with “good track records and good management teams.”
Cautious and conservative are adjectives that could only be applied to Ping An when compared with the blockbuster buying spree by Anbang, which snapped up a $6.5 billion portfolio of hotels from Blackstone just days before offering $13 billion for the Starwood group. In 2014 Anbang made headlines when it bought the historic Waldorf Astoria for close to $2 billion, quickly followed by its acquisition of a building on New York’s Fifth Avenue for over $400 million.
In 2013, Ping An became one of the first companies to take advantage of loosened restrictions on foreign investments by Chinese insurers when it purchased the Lloyd’s of London building for £260 million ($388 million). In 2015 the insurance giant stepped on the gas with another purchase of a London building for £327 million ($490 million), a $167 million investment in a Boston waterfront development by Tishman Speyer, as well as the $1 billion joint venture in U.S. logistics real estate. Ping An is also rumored to be bidding on a its first major project in California, a large office complex in a biotech hub near San Francisco.