Chinese fund to build £1 billion new financial district in London

Minsheng, the largest private investment fund in China, will develop a £1 billion new financial district in London.

China Minsheng Investment (CMI), the biggest private investment fund in the world’s second-largest economy, outlined plans on Saturday to develop a new financial district in London with a £1 billion investment in what will be the largest Chinese investment in the UK’s recent history.

Minsheng was launched last August with a registered capital of a little over £5 billion and this will be its most significant project to date, where the private equity firm will become the majority investor in the project.

Mayor Boris Johnson and the Chinese developer, Advanced Business Park, unveiled the project in 2013, which has been said could become London’s third financial centre in a 14-hectare plot of land at the Royal Albert Dock in east London.

"After the project is completed, it will be the international platform and foundation for Chinese companies and capital to enter the European market," Minsheng president Li Huaizhen told reporters in Shanghai on Saturday.

CMI’s spending spree

Minsheng Investment has been ramping up its acquisitions and investments recently, as in the last three months the company bought a plot of land in Shanghai for £2.6 billion and then acquired the business-jet charter operators Minsheng International Jet Co. and Asia United Business Aviation Ltd.

It’s part of a growing trend of Chinese companies that have been looking overseas to invest big, however, this marks a step-up in the investment from private firms rather than state-owned companies. Beijing has been looking to encourage the push from domestic companies as authorities recently relaxed regulations on outbound acquisitions, which will likely start an outpouring of money from China to acquire firms abroad.

However, at the same time, the Chinese government has also given private firms room to manoeuvre within the domestic economy, as authorities opened up previously government controlled sectors to investors.