Billionaire-Backed Mason Plans Acquisitions for Wealth UnitBy
European banks, Asian insurance companies on the radar: CEO
Firm backed by billionaire founder of Chinese developer Shimao
Mason Group Holdings Ltd., a Hong Kong financial firm backed by Chinese property tycoon Hui Wing Mau, is poised for an acquisition spree as it seeks to build an offshore wealth-management business of at least $3 billion in assets from scratch.
The company, which operates a brokerage and a healthcare business, is in talks with multiple firms to either acquire or form partnerships, with an aim to announce deals by the end of this year, Chief Executive Officer Alex Ko and Chief Operating Officer Joel Chang said in an interview in Hong Kong last week. Chang cited Fosun International Ltd.’s purchase of a German private bank last year as an example of a deal Mason might do.
“We are building a financial platform to tap into the global asset-allocation business,” said Ko, 58. “Buying a bank may sound a complicated thing to do, but Europe has a lot of well-regulated banks of different sizes that have a good standing in their own country.”
The main targets of Mason’s new wealth business will be increasingly affluent Chinese with a rising appetite for offshore investments. It’s entering a crowded space: The biggest private banks in Asia including UBS Group AG and Credit Suisse Group AG are all vying for a slice of a market that Capgemini SA estimated had more than a million millionaires in 2015. Ping An Insurance Group Co. said last week its online financial division will start servicing global clients out of Singapore, with a focus on Chinese nationals.
Hong Kong’s Securities and Futures Commission had issued 1,348 asset-management licenses as of March, a 51 percent increase from the number outstanding at the end of 2012, data compiled by regulator show.
Mason’s new wealth business would be able to lean on the firm’s Hong Kong brokerage to execute stock trades on its behalf in the city, Ko said. Separately, the firm is banking on its health business and links to Hui’s Shimao Property Holdings Ltd. in China to help it win wealth clients, Chang, 49, said.
The firm could market its services to customers of the baby-products chain it operates across China as well as its laboratory-testing and reproductive health clinics, he said. Mason intends to offer its financial products to individuals living in Shimao’s developments, he said. A Shimao investor relations representative confirmed the relationship between the two companies.
Asian insurance companies are also on Mason’s deal radar as the firm seeks to vary its product offerings for customers, Ko said.
While the executives didn’t disclose the amount they have to spend on purchases, Chang said Mason is nearly debt-free and has net assets of close to HK$6 billion ($768 million). The firm could raise funds through debt or equity issuance to finance deals if necessary, he said.
Hui, whose net worth the Bloomberg Billionaires Index puts at $5.4 billion, first invested in the firm last September, the month when Ko and Chang joined. The Shimao founder and chairman is Mason’s second-biggest shareholder, with a 17 percent stake. Joseph Tong, Mason’s co-chairman and a former executive director at Hong Kong brokerage Sun Hung Kai & Co., is the largest investor.
To build its financial capabilities, Mason brought in Ko and Chang, who both worked at Hong Kong-based investment bank Peregrine Investment Holdings Ltd. before it was broken up and sold following the 1997-98 Asian financial crisis. Ko was previously chairman of BNP Paribas Peregrine Capital Ltd. and chief executive officer of China Minsheng Banking Corp.’s CMBC International Ltd.
Still, their arrival hasn’t worked wonders for Mason’s share price, which is down 46 percent since the end of September and is valued almost a fifth lower than the book value of its assets, data compiled by Bloomberg show. The stock dropped 1 percent to 10.3 Hong Kong cents as of 11:09 a.m. in local trading on Monday.
Investors have yet to fully understand the company’s business plan, and that it will take time to build both the wealth and healthcare platforms, Ko said. “We are bringing together our corporate and financial businesses on a silver plate,” said Chang. “We know where the appetite is.”
— With assistance by Emma Dong