The company founded by the son of Tsar China Finance invests heavily in technology

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An investment company founded by the son of China’s most powerful financial official has invested heavily in technology companies, including subsidiaries of China’s leading Internet conglomerates Tencent and JD.com.

According to company records seen by the British “Financial Times”, Liu Tianran, the son of the company’s deputy prime minister Liu He, was listed as the chairman of Tianyiziteng Asset Management Co., Ltd. when it was established in Zhejiang Province at the end of 2016. The company is also known as It is Skycus Capital. Five out of ten people worked with Liu Tianran and confirmed that he was Liu He’s son.

According to the company’s filing documents, Liu Tianran gave up his position as chairman of Skycus in April 2017, six months after his father was promoted to the 25 Politburo members of the Chinese Communist Party. A year later, shortly after his father was appointed as the deputy prime minister in charge of the financial sector, he also transferred his shares in Skycus to another executive.

Liu He was a low-key figure before, but still waving big influence As President Xi Jinping’s most trusted advisor in financial and economic affairs. His promotion confirmed his position among the Chinese political elite.

According to Chinese government regulations, the children of senior officials are prohibited from managing companies in industries supervised by their parents, but they can be held in lower-level positions or consulting positions by such companies.

Several people close to Skycus’s operations department told the Financial Times that Liu Tianran also used the English name Andy and continued to deal with the company after retiring as chairman and transferring his shares. They added that he played a central role in a profitable transaction involving Tencent and JD.com.

According to company records, since its establishment 5 years ago, Skycus has grown rapidly and quickly became an aggressive deal maker with more than 10 billion yuan ($1.6 billion) in assets under management.

It has more than 30 employees with offices in Beijing and Shanghai and publicly recorded part of the company’s activities, which shows that the company has made at least a dozen investments in Internet, healthcare and logistics startups in recent years.

According to corporate records, Tencent, JD.com (JD.com) and the investment arm of China’s largest policy bank China Development Bank (China Development Bank) have also invested money in one of Skycus’ largest funds.

Ma Huateng (left), founder and CEO of Tencent Holdings, sits with Jack Ma, co-founder of his competitor Alibaba, in the Great Hall of the People in Beijing in 2018 ©AFP

Many of Skycus’ most profitable investments are in companies related to Tencent and JD.com. According to the prospectus document, Skycus invested $40 million in the spin-off of JD.com’s healthcare business in 2019-now worth nearly $230 million.Company records show that the company purchased shares in JD’s logistics business for US$70 million in March 2018. The valuation of these shares is at least twice that of JD’s completion. Initial public offering It will be listed on the Hong Kong Stock Exchange later this month.

According to US securities filings, Skycus also benefited from its US$5 million investment in Tencent Music in January 2018. It is estimated that the value of the shares is almost twice what it is today.

The sons and daughters of the “princelings” of China’s top leaders generally try to keep a low profile. But they continue to be attracted by the financial industry. An industry executive said: “Princelings must be extra cautious about everything they do, because it can easily attract their attention.” “But they will not disappear.”

Christopher Johnson, a former top CIA analyst in China, said that despite Xi Jinping’s increasing pressure, the princelings are still an influential group in China. Xi Jinping’s father was a senior political party and government official under Mao Zedong’s leadership.

Johnson, the chief executive of China Strategies Group, a consulting firm, said: “Like many others in the party elite, princeling lawmakers think Xi Jinping will be’their guy’ because he is their own. People.”

“On the contrary, he reduced their sphere of influence, especially the sphere of influence of the top elite families, but they are still important supporters in a system that Xi Jinping must carefully manage.”

Liu Tianran’s career development trajectory is very unusual. Before entering the financial industry, he was a reporter for the Economic Observer, a Chinese business newspaper. He edited the lifestyle section and wrote articles about football and economics.

Later, he joined the marketing department of CCB International, the investment department of one of China’s “big four” state-owned banks. Then, before founding Skycus in 2016, he joined an investment fund supported by the Shanghai Municipal Government.

After Tang Meng resigned in 2017, he succeeded Liu Tianran as the chairman of Skycus. According to the China Asset Management Association, Tang Meng entered the financial industry only six months ago after serving in Beijing for 17 years. The government’s National Security Agency and the People’s Liberation Army.

In May 2018, two months after his father became the Deputy Prime Minister of China, Liu Tianran’s name was completely deleted from Skycus business documents. Two companies under his control transferred their shares in Skycus to companies held by Tang and others.

After being promoted to Deputy Prime Minister, Liuhe’s business scope expanded to include trade negotiations with the United States and the European Union. He also leads the Chinese government’s powerful Financial Stability and Development Committee, which oversees the central bank and China’s banking and securities regulators.

This position made him one of the main officials overseeing Xi Jinping’s crackdown on Ant Group, Jack Ma’s financial technology company and its e-commerce group Alibaba. The ban has hit Jack Ma’s company the most, but it has also expanded to target other Internet platforms, including Alibaba’s competitor JD.com and at least one division of Ant’s largest online payment competitor Tencent.

In November, the regulator Blocked Ant’s planned $37 billion IPO In Shanghai and Hong Kong. If it continues, Ant’s market value will exceed 300 billion U.S. dollars, even more than the largest banks in China and the United States.

The State Council Information Office, Liu He’s office and Skycus did not respond to requests for comment. Tianran Liu could not be reached for comment.

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