Fosun Group, which is involved in a variety of businesses from investment, asset management, insurance and entertainment, announced Tuesday that it has acquired Guide Investimentos, a wealth management firm and institutional brokerage based in Sao Paulo.
Guide Investimentos serves 50,000 family and institutional clients in the country, according to its website.
Fosun agreed to pay BRL170m ($52m) to acquire the undisclosed stake plus up to BRL120m depending on the Brazilian firm’s future performance, according to a company statement.
The deal is currently pending regulatory approval and the expected completion is the first half.
It is unclear if the Chinese company took a majority stake. Our sister publication Fund Selector Asia sought more information, but the company declined to disclose the percentage of ownership.
Upon completion, Banco Indusval, a Brazilian bank, will reduce its ownership. According to the statement, the bank will then hold a maximum 20% stake in the wealth manager.
LatAm asset strategy
The acquisition is part of Fosun’s strategy to invest and build operations in emerging countries, particularly in Latin America, according to the statement.
Prior to purchasing Guide, Fosun acquired asset manager Rio Bravo Investimentos in 2016. The deal was the first investment by the Chinese conglomerate in Latin America. Sao Paulo-based Rio Bravo manages about 10bn reais ($3bn) of clients’ money in liquid funds, real estate and private equity investments.
Fosun’s broader plan is to create an innovative Brazilian financial group platform, aiming to serve the country’s families and institutions with different investment products and strategies.
Alex Gong, global partner and executive director at Fosun, said the firm has a long-term development strategy in Latin America and particularly in Brazil, where families have increasing demand for accessible, high quality financial products.
China buys AMs
Chinese authorities have taken steps to tighten capital outflows and discourage what they see as profligate corporate spending abroad. Authorities have banned companies from investing in certain sectors offshore, such as property and the entertainment industry. However, there are apparently no restraints on buyouts of offshore asset and wealth managers.
Among all the Chinese conglomerates, the Hainan-based HNA Group, has been the most an active buyer of foreign investment managers.
In March 2017, HNA became a stakeholder in Old Mutual’s US asset management unit, buying a 25% stake. At the time of transaction, the stake was worth $446m. It also bought $200m stake in SkyBridge Capital, a New York-based investment management firm. The deal is expected to complete by the end of this month.
Prior to that, HNA Group expressed interest in German asset manager Allianz in September last year and at one point was said to have had discussions about acquiring ownership of Hong Kong-based Value Partners.
Other Chinese conglomerates that have bought asset managers include Zhejiang Zhongnan Holdings Group and China Post Group.