How Anbang Will Take Over the World

Chinese insurer Anbang Insurance Group has made waves offering $13B to take over Starwood Hotels, just hours after spending $6.5B on Blackstone’s Strategic Hotels. The group’s ambitions are not just to be a real estate powerhouse though—they want to be a global force to be reckoned with.

Insurance companies are conservative, patient capital that look for safety in low-return investments.

In other words, they’re boring.

Not so Chinese insurer Anbang Insurance Group. The insurance company hit world headlines this week offering to pay $12.8B for Starwood Hotels to break up the hotel operator’s pending sale to Marriott International. That offer came just hours after spending $6.5B to acquire Blackstone Group’s 16-property Strategic Hotels portfolio.

The two deals, though, are not what’s most interesting about Anbang. It’s the sheer scale of its ambitions, which extend well beyond the world of commercial real estate.

“I hope that Anbang would have a global footprint, and that its influence will extend to every corner in the world,” said Anbang chairman Wu Xiaohui at a Harvard University event in March 2015. Indeed, Xiaohui—who said the air miles traveled by his investment team were equal to a round-trip to the Moon—said by the end of 2026, “Anbang’s asset scale will exceed your imagination.”

In the speech Xiaohui talked about Anbang being a global leader in internet banking and finance; financial management; building a global hospital franchise; life sciences; real estate; senior care; transportation; infrastructure; automobiles and energy.

“[Anbang] will be a global holding company with subsidiaries listed on many stock exchanges…we’ll acquire many listed companies from all over the world. We will also get listed all over the world, including Hong Kong, China and Europe. We must understand the Chinese capital markets, but we will also certainly come to [the] U.S. capital markets.”

If this is just the beginning for Anbang, just think what 2016 holds. After all, Anbang spent more than $8B in deals in 2015 alone, including:

• $1.95B on New York’s Waldorf Astoria hotel
• $714M for a four-office portfolio from Ivanhoe Cambridge
• 13 trillion won ($934 million) for South Korea’s Tongyang Life Insurance Co
• HK$3.3 billion ($420 million) to increase its stake in Chinese developer Sino-Ocean Land Holdings Ltd;
• $414M to buy the Merrill Lynch Financial Center office building in New York from Blackstone (for a reported 3.7 percent cap rate)
• $1.57B on U.S. life insurer Fidelity & Guaranty Life;
• $1.14B to buy and recapitalize Dutch insurer VIVAT
• €206M to acquirethe Belgian subsidiary of bank, Delta Lloyd Group.

Read the full transcript of Xiaohui’s Harvard speech to get insights into the insurance’s company’s investment; it’s corporate culture of “water, family and internet” and his description of Blackstone global head of real estate Jonathan Gray: “Like a checkbook. As soon as a check’s written, you can count on cashing it.”