Li Ka-Shing Invests Funds in Son's PineBridge After AIG Deal
Billionaire Li Ka-shing’s foundation hired PineBridge Investments LLC to manage some assets after his son Richard Li took over the fund management firm from American International Group Inc. this year.
PineBridge is overseeing about $300 million of the Li Ka- shing Foundation’s assets, according to Laura Cheung, a spokeswoman at the charity founded by the elder Li, Hong Kong’s richest man. While the foundation directly manages about 95 percent of an endowment exceeding $7 billion, external firms manage the rest, Cheung said in an interview.
The hiring comes a decade after Richard Li quit Hutchison Whampoa Ltd., his father’s largest company by market value, to independently run PCCW Ltd., Hong Kong’s biggest phone company. In 2006, an investment group that included Li Ka-shing failed to buy control of the carrier after Richard Li learned of his father’s involvement in the bid.
PineBridge may “offer some special products that may be of interest to high net-worth individuals, and obviously Mr. Li is one of the potential customers,” said Tim Leung, who helps manage about $1.5 billion at IG Investment Ltd. in Hong Kong.
PineBridge declined to comment, according to Talia Druker, who represents the firm at public relations company Finsbury Ltd.
The elder Li is boosting his investments this year, raising his stakes in Cheung Kong (Holdings) Ltd. and Hutchison, and unveiling a bid for U.K. power assets in July. Richard beat rival bidders including Macquarie Group Ltd. to buy PineBridge, which manages more than $78 billion of client assets including stocks, bonds and investments in private equity and hedge funds.
Richard Li’s Pacific Century Group in March paid an initial $277 million to buy PineBridge as AIG sells assets to repay a $182.3 billion U.S. government bailout. Pacific Century also controls PCCW, in addition to property assets in countries including China and Japan. The acquisition of PineBridge follows the sale of a Pacific Century insurance unit in Hong Kong to Brussels-based Fortis in 2007.
In 2006, Richard Li said he would have removed himself from negotiations had he known of his father’s involvement in a group that was bidding to gain a controlling stake in PCCW, according to a letter to Hong Kong’s Legislative Council.
The younger Li agreed to sell the PCCW stake that was held by his Pacific Century Regional Developments Ltd. to a group led by former Citigroup Inc. banker Francis Leung in July 2006, and said he wasn’t aware of his father’s involvement in the group until a month later, according to the letter.
PineBridge last week named Mervyn Davies, former head of Standard Chartered Plc, as chairman. The appointment of the executive, who had worked in Europe, Asia and the Middle East, will boost the firm’s global expansion, PineBridge said.
Li Ka-shing said last month he planned to add to his holdings at Cheung Kong and Hutchison, as the two companies reported earnings that beat analysts’ estimates. They own operations in industries spanning property, ports, telecommunications and retail in more than 50 countries.
The 82-year-old billionaire bought 5.9 million Hutchison shares on Aug. 10, his biggest single purchase since at least 2003. In 2010, he boosted his holding in the company more than 30 times, while adding to his stake in Cheung Kong on more than 40 occasions, according to Hong Kong stock exchange data.
In July, the elder Li’s companies and his charity foundation offered 5.8 billion pounds ($8.9 billion) for Electricite de France SA’s U.K. power networks for the billionaire’s biggest acquisition.
The elder Li was listed as the world’s 14th-richest person in March by Forbes magazine, compared with 16th a year earlier, after his wealth increased 30 percent to $21 billion.
Last month, the elder Li reiterated a plan to allocate a third of his wealth to his charity. His foundation has an endowment of more than $7 billion after making almost $1.5 billion of donations since its founding in 1980, according to spokeswoman Cheung.