In the latest sign of the appeal of China’s real estate market, Blackstone China Chairman Antony Leung is leaving the US private equity giant to head Hong Kong-based real estate developer Nan Fung.
After seven years running Blackstone’s 120-person China operations, Leung will take responsibility for family controlled Nan Fung starting in February – according to a statement issued by the two firms yesterday. The former chairman will remain an advisor to Blackstone.
Financial Heavyweight to Concentrate on Real Estate
Leung has a long history in the region’s finance industry, and was instrumental in developing Blackstone’s close ties with the Chinese government. Last year China’s State Administration for Foreign Exchange (SAFE) invested $500 million into Blackstone Real Estate Partners VII fund, and Leung is said to have brokered China Investment Corporation’s (CIC) $3 billion investment into Blackstone’s 2007 IPO.
In an internal Blackstone memo seen by Bloomberg News, the company’s chairman, Stephen Schwarzman wrote, “During his seven years with Blackstone, Antony has helped build some of our most important relationships in China.” Some analysts speculate that Leung was behind Schwarzman’s establishment of a US$300 million scholarship fund at Beijing’s Tsinghua University earlier this year.
Just this month Blackstone announced that it was selling a London business park to CIC for US$1.28 billion, in the latest deal between the private-equity firm and China’s sovereign investment fund.
Before joining Blackstone, Leung served as Hong Kong’s financial secretary from 2001 to 2003 after a long banking career with Citicorp (now Citigroup) and JPMorgan Chase. Prior to joining the Hong Kong government, Leung had served as Chase’ APAC Chairman.
Nan Fung Getting Aggressive
In taking over Nan Fung, Leung appears to be part of an aggressive expansion by the Hong Kong developer.
In July this year the company, said to be among Hong Kong’s largest privately owned real estate developers, bought Forterra Trust and its associated management companies for US$184 million. The move to take over Forterra’s China real estate assets gave the Nan Fung the ability to expand cheaply into China as Forterra’s directors were being pursued by the Irish government for having illicitly obtained the properties from their investors.
Vivien Chen Wai-wai, Nan Fung’s chairwoman, took over control of the firm in 2009 from her father, Chen Din Hwa. The elder Chen passed away in June 2012.
Leung Led Blackstone’s China Property Deals
During his time at Blackstone, in addition to building the firm’s ties with the Chinese government, Leung oversaw a number of investments into China’s real estate sector, including a US$400 million acquisition of a 40 percent stake in mall developer SCP at the beginning of this month.
Before investing in SCP, Blackstone in August this year acquired Hong Kong-based developer Tysan for $322 million, which has a number of residential projects in China. In 2012 the private-equity firm acquired the 50,000 Huamin Imperial building in Shanghai’s Jing An district.