Friedmann Pacific Mike Poon talks about his investment in global aviation value chain with French media Le Journal du Dimanche

29 Oct 2017

Source: Le Journal du Dimanche

Mister Poon’s First Confession

PRIVATIZATION – The main shareholder in the Toulouse-Blagnac Airport had disappeared from the radar in 2015. The JDD found him.

His visits to Paris have become rare. He does not remember the date of his last trip to Toulouse. The most well- known of Chinese businessmen in France, Mike Poon, only makes quick stops in France. And his arrival in the capital is no stranger to the imminent sale of the 10% still held by the State in the Toulouse Airport. To general surprise, Mike Poon became its owner in 2015 (with 49.9% of its capital), but he carefully watches the 10% share that would assure him total control. He brushes off with a laugh the question of any eventual meeting on the subject with the Ministry of Finance during his stay. “I’m still waiting to know the position of your government on that matter,” he says with a smile. “But you will be the first to know if such a meeting occurs.”

But it is indeed a hole in his agenda that made the Hong Kong businessman famous. In May 2015, a few months after having won the Toulouse Airport’s call for tenders, Mike Poon disappeared for several weeks. An identical scenario would happen for several CEOs, like Guo Guanchang, the billionaire at the head of Fosun, owner of Club Med, was also detained for several weeks. “The government was investigating practices in the aviation sector,” clarifies Mike Poon. “I was interrogated in relation to these investigations. The issue remains just as mysterious to me as it does to you. What is essential is that everything was found to be in compliance with the law. I never stopped working during that period. But regarding my shareholders and my clients, whose funds I was managing, it was best that I step back while the investigation continued.”

The Hong Kong businessman, with an air more British than Chinese in his pin-striped tailored suit, has little in common with the entrepreneurs of the Middle Kingdom. His investment company, Friedmann named after Milton Friedman, the American economist considered as a grand theorist of economic liberalism. But part of the 4 billion dollars managed by Mike Poon through several companies, including CALC or CASIL, comes from Chinese state-owned enterprises. “They wanted to invest with us because they have confidence in our ability to choose the right investments,” insist the businessman. “In China, like elsewhere, you are judged on your ability to create value.”

“We have thorough knowledge of the sector’s whole value chain.”

Since the creation of Friedmann in 2000, Mike Poon laid out a financial strategy of formidable efficiency. The fund manager specialized in the aviation sector, in which it became the biggest private investor. It is number one in the purchase of new airplanes for Chinese airlines. “ When we began around ten years ago, China only had 600 airplanes, compared with 3,000 today,” he exclaims.  It is one of the biggest customers of Airbus, whose Toulouse factories it knew well before becoming interested in the local airport. From the buying and leasing of aircraft, he transitioned from the industrial sector, becoming a shareholder in a Chinese assembly site next to Comac. His company is now the biggest customer of this Asian company that aims to rival Airbus and Boeing.

Finally, a few months ago, Friedmann bought an American airplane recycling company. “We were the first Chinese company to make an acquisition in the American aviation sector, just as we were the first to buy an airport outside of China. We have thorough knowledge of the sector’s whole value chain: aircraft purchases, leasing, maintenance service for airlines and airport management,” summarizes Mike Poon.

Before winning the Toulouse-Blagnac bid in the spring 2015, the Hong Kong fund had failed to acquire the Athens and Ljubljana airports. Mike Poon recognizes that he paid a bit extra to avoid missing out on the first French privatization in the sector.

In Toulouse, the commonly held view is that the promises of new flows between the southwest and China have not been kept. “Five Chinese airlines have requested new traffic rights in the direction of France and at least one of them has designated Toulouse as its new destination,” assures the investor. “Our team in China actively promotes the Toulouse Airport, which has already seen its passenger traffic rise by around 15% this year.” Mike Poon was also confronted by local backlash to the rise in dividends that the airport’s surveillance committee planned to award its new shareholder. “We will show that we are going to transform a classic transport infrastructure into a high-performing airport, but it takes time,” explains the Hong Kong businessman, who, above all, does not want to give the impression of being a Chinese man in a hurry.