Multibillion-dollar Chinese investment firm HNA Group is in the process of finalizing the creation of a New York-based foundation that will own a 30% stake in the conglomerate. Once the nonprofit, named Hainan Cihang Charity Foundation, is up and running, it will become HNA’s largest shareholder, the Wall Street Journal reports.
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HNA has roughly $146B in assets under management, half of which are outside China. The firm has been an aggressive investor in U.S. assets, particularly real estate. Since the start of 2016, HNA has negotiated deals worth $25B that include its 25% stake in Hilton Worldwide Holdings that it purchased from Blackstone Group for $6.5B, a large stake in Deutsche Bank AG and a not-yet-completed deal to acquire White House communications director Anthony Scaramucci’s stake in hedge fund SkyBridge Capital.
The deal with Scaramucci gained a lot of media attention in January when the communications director was in the running for White House senior adviser — a position now held by President Donald Trump's son-in-law Jared Kushner. Scaramucci was passed over for the position amid concerns about his hedge fund being sold to a mysterious HNA subsidiary that owned a 29.5% interest in HNA, equivalent to $18B. That subsidiary’s interest has been transferred to the New York nonprofit, which HNA registered with the state in December, Quartz reports.
In Midtown Manhattan, the nonprofit — which has yet to begin operations — will likely be required to disclose additional information about its holdings, financials and activity to Chinese regulators amid a government crackdown that is scrutinizing the amount of money leaving the country to fund foreign acquisitions. HNA is one of several companies under the microscope for their foreign acquisition sprees; others include Dalian Wanda, Fosun and Anbang.
According to people familiar with the matter, Manhattan was the perfect backdrop for the charitable foundation due to tax benefits and its proximity to other HNA-owned assets, the Journal reports. The foundation will also be required to keep about 5% of its net assets on the books annually to give to charity.
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