China corporate raider’s wealth soars ninefold to $17bn

Posted on October 12, 2016

The secretive billionaire who launched a hostile takeover bid for China’s largest property developer has emerged as one of the country’s richest people, illustrating how leveraged financial investments are propelling huge increases in private wealth.

According to the Hurun Report’s annual China Rich List, Yao Zhenhua’s net worth surged more than nine times to $17.2bn last year, making him the country’s fourth richest person. Last year he was ranked 204th.

Wang Jianlin, the entertainment mogul behind a series of high-profile acquisitions in Hollywood, and internet tycoon Jack Ma retained their spots at the top of the list, with fortunes of $32.1bn and $30.6bn respectively.

Mr Yao, 46, is based in the southern Chinese city of Shenzhen and first made his fortune in real estate. But it was his Baoneng Group’s foray into insurance and subsequent raid on Vanke, a cross-city property rival, that fuelled the estimated ninefold increase in his net worth in the space of a year.

Baoneng is believed to have borrowed heavily to fund its share purchases in Vanke and is now the developer’s largest single shareholder with a 25 per cent stake.

“Yao represents the new wave of wealth creation by financial investments in China,” said Rupert Hoogewerf, who compiles the annual list.

Baoneng’s raid has been bitterly resisted by Wang Shi, Vanke’s founder who has sought out white knights in a so far successful effort to retain control of the management-led company. The takeover battle fuelled a surge both in the price of Vanke’s Shenzhen-traded shares and Mr Yao’s known worth.

It is not unusual for the documented wealth of China’s richest people to surge suddenly — or even for previously unknown tycoons to burst into prominence — as stock exchange listings and other public investments thrust them into the spotlight.

“We miss a heck of a lot of people,” Mr Hoogewerf told the Financial Times. “I was in Beijing two weeks ago and visited this investment company. In the space of one afternoon I discovered 30 people who went on to our rich list this year. Last year they were under our radar.”

Hurun’s China Rich List, which tracks more than 2,000 private entrepreneurs with a net worth of $300m or higher, added 179 names to its roster this year.

Hurun estimates that there are now 594 US dollar billionaires in China and another 94 in Hong Kong, Taiwan and Macau, compared with 535 in the US.

Despite the surge of private wealth in China, the country’s billionaires have not yet cracked the top ranks of global rich lists. Hurun estimates that Mr Wang, China’s richest man and head of the Wanda group, ranks 26th globally.

Mr Hoogewerf said Mr Wang delisted his group’s property arm from the Hong Kong stock exchange this year in the hope of realising a richer valuation for it on the Shanghai or Shenzhen bourse.

If successful, Hurun estimates Mr Wang’s net worth could soar past $50bn, making him one of the world’s 10 richest men.

Additional reporting by Hugo Greenhalgh in London

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