Too Big to Bail
We'd like to bear witness against the notion that Chinese giants are simply propped up by their government when they stumble. Sure, China's central bank and regulatory bodies shut Anbang down a few years ago, and prosecuted its chairman for ambition overweening. But now the company has been restructured as Dajia Insurance, and privately financed through a $3b tender offer that LehmanBush has been chosen to participate in.
"JD.com has been allocated rights to a 33% stake in the newly structured entity," says Edward Lehman, "and we've received rights to 15% of that stake. It's a great opportunity for both ourselves and western investors to participate in what is fundamentally still a very sound company. It's also proof-positive that the public-private dynamic of China's government and its biggest companies is increasingly weighted to financialization through capital markets."
"Just as new QFII rules make it much easier for institutions to invest in China's stock market, relaxed regulations make it much more feasible to invest directly in Chinese banking and insurance enterprises," says LehmanBush president Lawrence Liu. "We're going through the education process on those regulations with quite a few capital groups who see the upside in the restructure of a company that was once 139 on the Global Fortune 500 list."