Leung, who turns 62 in January, will take charge of the Hong Kong property developer in February, the companies said in a joint statement today. He will become a senior adviser to New York-based Blackstone and a member of its International Advisory Board, according to the statement.
The former Hong Kong financial secretary joined Blackstone in 2007 and brokered a $3 billion investment by China’s sovereign wealth fund into the U.S. firm’s initial public offering the same year. Including dividends, China Investment Corp. is estimated to have profited about $300 million from the stake, according to people familiar with the matter and data compiled by Bloomberg.
“During his seven years with Blackstone, Antony has helped build some of our most important relationships in China,” Blackstone CEO Stephen Schwarzman wrote in an internal memo obtained by Bloomberg News.
Leung helped Blackstone forge ties with CIC and raised money from state-backed institutional investors in China for the firm’s global funds. He oversees more than 120 Greater China employees for the firm, which has more than 220 staff members in the Asia-Pacific region.
Blackstone is in talks to sell Chiswick Park, a London office development that includes buildings leased to PepsiCo Inc. and Walt Disney Co., to CIC for about 800 million pounds ($1.3 billion), a person with knowledge of the matter said on Nov. 11. Blackstone gave CIC exclusive rights to review the asset, one of the people said.
Blackstone agreed to sell a non-voting stake of less than 10 percent to CIC in May 2007 at about a 4.5 percent discount to the firm’s $31 IPO price. The private-equity firm has distributed $5.32 in dividends per share since its offering. Based on last week’s closing price of $27.56 and including the dividends, CIC’s shares are worth about $32.88 apiece, or 11 percent more than its entry price.
CIC’s press office didn’t immediately respond to a phone call or an e-mail seeking comment about Blackstone’s investment.
Leung, who sits on Blackstone’s executive committee, has helped bolster the company’s purchases of real estate assets in China. The firm is stepping up real estate investment in Asia, seeking to raise $4 billion for Blackstone’s maiden property fund focused on the region.
Blackstone earlier this month agreed to buy a 40 percent stake in SCP Co., a Chinese shopping mall developer and operator, for about $400 million, a person with knowledge of the matter said at the time. It is the firm’s largest mall investment in Asia to date, said Chris Heady, head of Blackstone’s regional real estate business.
The company is also investing in property projects including distribution centers and a skyscraper in Shanghai, Schwarzman said in a Bloomberg Television interview on Oct. 24.
Blackstone hasn’t invested much in private equity in China since it established its presence in Asia in 2007 because the prices of those assets are too high, Leung said April 7. The firm named Michael Chae in December 2010 as the head of its Asian private equity business.
The firm purchased a 20 percent stake in China National BlueStar Group for as much as $600 million in October 2008, Blackstone’s first Chinese acquisition. That investment has yet to make a profit because of overcapacity in the chemical industry, a person familiar with the situation said.
Among Blackstone’s recent investments in China, Pactera Technology International Ltd. agreed last month to be bought in a transaction that values the Dalian-based provider of technology outsourcing services at $645 million.
Leung was Hong Kong’s financial secretary from May 2001 to July 2003. He joined Chase Manhattan Corp. in 1996 before it became JPMorgan Chase & Co., and left as Asia-Pacific chairman in 2001. Prior to that, he spent 23 years at Citicorp, which became Citigroup Inc.
Blackstone was the first global private-equity firm to set up a fund with the Chinese government, agreeing in August 2009 to a 5 billion yuan ($821 million) joint venture to target investments in Shanghai and neighboring areas.
Nan Fung was founded in 1954 by D.H. Chen, father of the company’s current Chairman Vivien Chen, according to today’s statement. The company owns residential, commercial and industrial properties.
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