Nisha Gopalan is a Bloomberg Gadfly columnist covering deals and banking. She previously worked for the Wall Street Journal and Dow Jones as an editor and a reporter.

Whatever they say about capital outflows, it's still business as usual in China. So long as government-connected companies do the buying and steer clear of football teams and other "irrational" assets, that is.

Legend Holdings Corp., the Beijing-based conglomerate that owns computer maker Lenovo Group Ltd., is buying a controlling stake in one of Europe's oldest privately held banks from its Qatari owners for 1.5 billion euros ($1.8 billion), according to a Hong Kong exchange filing. The transfer of the 89.9 percent interest in Banque Internationale a Luxembourg SA is the latest in a spate of deals that have involved Chinese companies purchasing European financial assets.

Legend, which took a minority stake in British insurer Pension Insurance Corp. last year, is following in the footsteps of other Chinese conglomerates that have come under scrutiny for debt-fueled purchases. Fosun International Ltd. and Anbang Insurance Group Co. both have interests in European insurers and private lenders, while HNA Group Co. owns part of Deutsche Bank AG.

It's a sign of how compelling the sector has become. Legend, which created Lenovo from its 2005 acquisition of International Business Machines Corp.'s PC unit, says it wants to build a global banking brand as well as a lender to service companies participating in President Xi Jinping's One Belt, One Road initiative.

The real draw, however, lies in managing Chinese residents' money overseas.

Deal Dearth
Chinese acquisitions overseas have dwindled after Beijing began cracking down on private firms' debt-fueled buying spree
Source: Bloomberg

Even as China clamps down on corporate borrowing offshore, individuals' wealth outside of the mainland continues to balloon. About 56 percent of high-net-worth investors surveyed by China Merchants Bank Co. and Bain & Co. had investments outside of China, compared with 19 percent in 2011, the 2017 China Private Wealth Report released in June showed.

Chinese firms are out to capture a part of this: Lufax, the fintech giant owned by Ping An Insurance Group Co., launched an online money management platform in Singapore in July, while Noah Holdings Ltd., a wealth manager focused on China's second- and third-tier cities, is opening branches in Vancouver and Australia.

Continental Appeal
Legend's Luxembourg acquisition is one of the biggest investments by a Chinese firm in the European financial service arena
Note: Data excludes HNA Group's acquisition of Deutsche Bank stake.

Legend has clear state ties. It was established in 1984 with funding from government think-tank the Chinese Academy of Sciences and is 9 percent controlled by China's National Social Security Fund, data compiled by Bloomberg show. It's a backer of Chinese private equity firm Hony Capital Ltd., which bought U.K. restaurant chain PizzaExpress Ltd. in 2014, and it's behind venture capital fund Legend Capital plus property outfit Raycom Real Estate Development Co.

It's also worth remembering that banks and insurers aren't on Beijing's no-go list. Done by the right companies at the right time, Chinese offshore acquisitions can still be a success. This venerable Luxembourg lender looks to tick all the right boxes.

This column does not necessarily reflect the opinion of Bloomberg LP and its owners.

To contact the author of this story:
Nisha Gopalan in Hong Kong at

To contact the editor responsible for this story:
Katrina Nicholas at