Good opportunity and right strategy have helped conglomerate Fosun seize overseas deals, reports Cai Xiao from Shanghai

Liang Xinjun, chief executive officer of Chinese private conglomerate Fosun Group, has become fitter than he was a year ago after having lost more than 5 kilograms and paying more attention to his health.

"We gained good investment returns in the past 20 years, but, compared with Warren Buffett's nearly 50 years of good results, we are still far behind," said Liang. "Keeping fit is essential for investment."

A flag of Fosun Group flutters at the headquarters in Shanghai, China, 29 May 2013. [Photo/icpress.cn]

In the past 20 years, Fosun Group has invested in more than 70 deals, and its annual investment return rate was about 30 percent.

Fosun regards Berkshire Hathaway as a learning model and follows a similar pattern, being an investment group with a core business based on insurance.

"We found three types of opportunities. One is grafting the world's excellent resources with China's strong engine, so we take a good look at deals related to consumption upgrading and services," said Liang, adding there is also potential to help Chinese companies listed abroad to become private and leading companies to integrate their industries.

Fosun has seized the first type of opportunity well. In the first half of this year, Fosun invested in three foreign companies: US high-end women's knitwear producer St John Knits International Inc with $55 million for 33.3 percent stake, Israel-based cosmetic laser solutions and medical lasers provider Alma Lasers Ltd with $221.6 million for 95 percent stake, as well as a $22.5 million investment in US-based Saladax Biomedical Inc, which focuses on tumor diagnosis, and became its single largest shareholder.

The three big moves were made after their first two successful investments in French resort operator Club Mediterranean SA in 2010 at a cost of 44 million euros ($58.9 million) and Greece-based high-end retailer Folli Follie Group SA in 2011 with an initial investment amount of 84.58 million euros.

"When going abroad to do some M&As, we look for industries in which the Chinese market share will occupy 20 to 30 percent of the global entity in the coming five to 10 years, such as luxury industry, and then we choose the No 1 or No 2 company in these industries, "said Liang.

Fosun would become their first- or second-largest shareholder and then help these companies improve their business performances in China.