Co-Founders of Chinese Private-Equity Firm Boyu Build Singapore Base

Two co-founders of China’s Boyu Capital, a leading private-equity firm set up by a grandson of former Chinese President Jiang Zemin, have relocated to Singapore with a share of the company’s operations from its Hong Kong headquarters, according to people briefed on the move.

Boyu’s tilt toward the Southeast Asian city-state of Singapore was mainly driven by concerns over the ebbing clout of the elder Mr. Jiang, 94 years old, whose patronage has buttressed the firm’s success, the people said.

The transition, which began in late 2019, has coincided with Chinese leader Xi Jinping’s efforts to curb the influence of retired Communist Party elders and tighten Beijing’s control over the Chinese territory of Hong Kong.

Compared with Hong Kong, Singapore offers Boyu greater distance from potential scrutiny or adverse action by authorities in Beijing, these people said. Boyu’s Singapore office, its first presence outside China, provides a potential refuge from political intrigue within the party, they said, and helps the firm diversify from its base in Hong Kong, where business confidence has been shaken by unrest and Beijing’s efforts to stamp out dissent.

Launched a decade ago by Alvin Jiang—the former leader’s grandson—and three co-founders, Boyu has won a reputation for being a well-connected and savvy China-focused investor, whose backers have included Hong Kong billionaire Li Ka-shing and Singaporean state investor Temasek Holdings.

Sean Tong, one of the Boyu co-founders, recently acquired permanent residency in Singapore, where he is chief executive officer of a fund-management company that also uses the Boyu name, according to corporate and government records. Boyu’s founding CEO, Louis Cheung, has also moved to Singapore, the people briefed said. Corporate filings indicate that both men are Chinese nationals with Hong Kong permanent residency and that Mr. Cheung has a Singapore work visa.

Boyu is also transferring part of its Hong Kong operations to a branch office in Shanghai, one of the people said. The younger Mr. Jiang, who has been based in Hong Kong for the bulk of his corporate career, now spends most of his time in Shanghai, where his family is based, the people said.

It couldn’t be learned how much of Boyu’s Hong Kong functions are being moved either to Singapore or to Shanghai. The firm hasn’t publicized the establishment of its Singapore office, located in a shared working space in an upscale commercial tower in the main business district. Boyu’s website lists offices in Hong Kong, Beijing and Shanghai.

Messrs. Jiang, Tong and Cheung didn’t respond to requests for comment. A Wall Street Journal reporter who recently visited Boyu’s Hong Kong office was turned away by a receptionist who declined to relay messages to the firm’s senior partners. A receptionist at the Singapore shared working space confirmed to a Journal reporter that Boyu is located there.

The elder Mr. Jiang was Communist Party chief for 13 years until 2002 and a patron to a group of officials—known as the “Shanghai clique”—that rose to senior posts under his tutelage. Many of these officials have since faded from view and some have been purged in Mr. Xi’s anticorruption drive.

Party insiders say Mr. Xi, in centralizing power, has curtailed the influence of retired elders who seek to steer decision-making to suit their own interests. Though the elder Mr. Jiang’s sway diminished as Mr. Xi grew dominant, the former leader’s eventual passing could further alter power dynamics within the party and leave his family and allies more vulnerable to purges, the insiders say.

Late last year, Mr. Xi halted Chinese financial-technology giant Ant Group Co.’s initial public offering in part due to concerns over Ant’s complex ownership structure and the investors who stood to gain most from what would have been the world’s largest IPO, which included Boyu and a company controlled by the son-in-law of a retired top official with ties to the elder Mr. Jiang, the Journal reported this month citing Chinese officials and government advisers.

Industry insiders say the younger Mr. Jiang, also known as Jiang Zhicheng, tapped his elite pedigree in building Boyu. Mr. Jiang, who got his undergraduate degree at Harvard University, had a short stint with Goldman Sachs Group Inc. before launching Boyu in his mid-20s, bringing in top deal makers and finance veterans—former TPG Capital partner Mary Ma and Messrs. Tong and Cheung—as co-founders who lent instant credibility to Boyu. Ms. Ma died of cancer in 2019.

Boyu became known as a “princeling” fund, a reference to the colloquial label for descendants of senior Chinese officials. The firm made its mark with high-profile deals including its 2011 purchase of a controlling stake in Sunrise Duty Free, a retailer with outlets at Beijing and Shanghai airports, and its 2012 investment in e-commerce giant Alibaba Group Holding Ltd. , whose founder Jack Ma also controls Ant. Boyu has also teamed up with sovereign-wealth funds such as China Investment Corp. and Singapore’s GIC Pte. Ltd.

Corporate records indicate that Messrs. Tong and Cheung started building Boyu’s presence in Singapore in late 2019, though Mr. Tong only recently obtained his permanent residency. At the time, violent antigovernment protests were engulfing Hong Kong, where many relatives of China’s Communist Party elite have hoarded their wealth and based their businesses, taking advantage of the territory’s accommodating regulatory regime and rule of law under an independent judiciary.

Boyu’s transition continued as Beijing imposed a sweeping national security law on Hong Kong last year—legislation that many foreign businesses executives say they fear would undercut rule of law and spur further changes that erode the territory’s role as a gateway connecting Western finance with Chinese businesses.

Corporate records named Messrs. Tong and Cheung as founding directors of Boyu Capital Management (Singapore), a fund-management company registered in November 2019. The filings also indicated that Boyu’s chief financial officer, Vincent Fok, joined the company as a director this month and has a Singapore work visa. Mr. Fok didn’t respond to queries.

Mr. Tong is also CEO of this company, which operates under a license that requires its CEO to be resident in Singapore, according to an online government directory. The directory lists Boyu’s website as part of the company’s contact details.

The company has only one shareholder, Cayman Islands-registered Boyu Group International Ltd., of which Mr. Tong is the sole director, according to data from corporate registries in Singapore and the Cayman Islands.

Company filings show that Mr. Tong, also known as Tong Xiaomeng, has become a Singapore permanent resident with a local identity card. It couldn’t be determined exactly when he acquired this status, though he was using other identification documents—rather than a Singapore identity card—in local corporate filings as recently as December.

Mr. Tong has met with Singapore’s Economic Development Board, the government agency responsible for attracting foreign investment, to discuss setting up Boyu’s presence in the city-state, according to people briefed on the matter.

One of the people said Mr. Tong was granted permanent residency in Singapore late last year through the EDB’s “Global Investor Programme,” under which eligible foreigners can seek permanent residency by investing at least 2.5 million Singapore dollars, equivalent to about $1.9 million, to start a new company, among other options. Such applications take about nine to 12 months to process, according to an EDB fact sheet. EDB declined to comment.

Source: WSJ News

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