China Everbright eyes $1.5 bln financial deal in overseas push

Julie Zhu

HONG KONG, March 31 (Reuters) - The financial services arm

of state-owned China Everbright Group plans to allocate $1.5

billion of its 2017 spending to the purchase of a fund manager,

private bank or insurer overseas to help it raise cash more

easily and extend its presence abroad.

Chen Shuang, chief executive of Hong Kong-based China

Everbright Limited (CEL), said in an interview on

Friday that the company was planning to "significantly" increase

overseas deals, including in the financial sector.

Chinese companies have come under pressure from Beijing to

rein in overseas purchases, as the government tries to stem

speculation, slow capital flight and shore up the yuan.

"It's not an easy job (for Chinese firms) to raise capital

in U.S. dollars and invest in overseas markets," Chen said.

"We certainly need to make such strategic acquisitions to

help our fundraising and extend our footprint overseas."

Chen said the firm, which raised $6 billion last year, was

actively scouring America, Europe and Hong Kong for possible

financial targets. He declined to elaborate.

After deals including the tie-up between UK fund managers

Standard Life and Aberdeen Asset Management

earlier this year, more acquisitions are expected among asset

managers and the broader financial sector in 2017.

Chen said Beijing's capital restrictions would not prove a

hurdle for the company, which manages a total of 36 funds in

both yuan and U.S. dollars - but the constraints would contain

corporate China's broader ambitions overseas.

"The Chinese regulatory changes have already caused some

difficulties for Chinese companies going global. It's an

irresistible trend - Chinese firms and individuals going abroad

to diversify their asset allocations," he said.

In 2014 and 2016, CEL launched two dollar funds worth a

combined $460 million - its first moves to tap overseas markets

and buy international know-how to upgrade China's domestic


Last summer, it teamed up with venture capital firm IDG

Capital Partners to set up a $3 billion fund, China's largest

buyout fund at the time.

Chen said CEL was looking to raise another $1.4 billion to

help fund the overseas push, including $600 million to be raised

by its Overseas Infrastructure Fund within the year, which in

2016 acquired Albania's Tirana International airport for an

undisclosed sum.

Already invested in tech and finance, CEL, through the

infrastructure fund, will further invest in

infrastructure-related projects in Hong Kong and regions covered

by China's ambitious "One Belt, One Road" initiative.

CEL has been among China's financial players that have

pushed into leasing: it is the biggest stakeholder in China

Aircraft Leasing Group Holdings(CALC).

Chen said CALC, which leases mostly to Chinese airlines,

would increase the number of its planes from 85 currently to 120

this year and 200 by 2020.

(Reporting by Julie Zhu; Editing by Clara Ferreira Marques)