China’s HNA Capital to launch $3.2bn ‘Belt and Road’ funds

HNA Group’s financial unit will use the two new vehicles to invest in infrastructure and financial services in the region.

HNA Capital, the financial arm of Chinese aviation and financial services conglomerate HNA Group, is planning to launch two funds with a total size of 20 billion yuan ($3.15 billion; €2.59 billion) to target projects under the country’s “Belt and Road” initiative.

The two Belt and Road funds will invest in infrastructure projects, as well as in the financial services, industrial and technology sectors in China, the Greater Bay region and Southeast Asia.

HNA Group did not provide further details about the funds.  A spokesman for the group told Infrastructure Investor that “The specific title of the fund is being drawn up with the partners and is not yet determined.”

Seed capital, which HNA Group will invest in the future, will account for 20 percent of the $3.15 billion total, he added.

HNA is sponsoring the fund programmes and seeks to introduce investors from ASEAN countries through its partners in Hong Kong and the Hong Kong-ASEAN Economic Cooperation Foundation. The firm expects to share its expertise and resources in areas of financing, leasing, internet finance and fintech – allowing investors to tap into the opportunities emerging from the Belt and Road initiative, which was proposed by Chinese president Xi Jinping in 2013 to build infrastructure and connect Eurasian countries along the ancient silk road routes to promote trade and economic growth.

HNA Capital, which owns aircraft leasing business Bohai Capital Holding and online financial platform Jubaohui, has specialised in leasing, insurance, trust, internet finance and securities over the past 10 years. According to its website, it manages more than 30 affiliated companies with total assets exceeding 420 billion yuan.

Earlier this week, HNA Group signed a strategic partnership agreement with Chinese logistics firm GLP to set up a joint fund platform to oversee and expand the logistics networks of both companies.

HNA and GLP did not disclose further details about the partnership other than to say they will co-operate closely in areas such as aviation logistics infrastructure, industrial parks, supply-chain finance and the whole range of aviation logistics services.

HNA Group, which was founded in 1993 as a regional airline based on Hainan Island in Southern China, has faced criticism for its “aggressive” shopping spree over the past few years as it has spent billions on buying assets across the world from airports in Brazil and Germany to a stake in Deutsche Bank to properties in London, New York and Hong Kong. The group is in the process of divesting some of its assets to reduce its debt.

As at the end of 2017, the group’s assets totalled 1.5 trillion yuan, with revenue of nearly 700 billion yuan and a liability-to-asset ratio of 59.9 percent.