The $1.6bn private equity debutant

Logistics real estate group GLP has burst on to the private equity scene with a 10 billion yuan fund. But who is the man behind the money?

If you visit the ‘finest walk in the world’, New Zealand’s Milford Track, in January, you might meet Ming Mei, the co-founder and chief executive of global logistics giant GLP. That’s when he’s likely to be enjoying a long-awaited present to himself: time off pursuing one of his favourite pastimes, hiking. The 53-kilometre trek is on his bucket list. He would have been negotiating the track’s mountain passes, boardwalks and suspension bridges earlier, if the consortium of investors he led had lost its bid to privatise the business he set up almost a decade ago. But a gruelling 18-month process, culminating in victory for the consortium in July, meant the trip had to wait.

The consortium comprised a who’s who of investors, including some of Asia’s most prominent entrepreneurs. Mei’s own investment business, heavyweight private equity firms Hopu Investments and Hillhouse Capital Group, state bank Bank of China Group Investment and property company Vanke were all involved. Their investment broadens a GLP investor base that includes Hong Kong’s de facto central bank Hong Kong Monetary Authority, the China Investment Corporation; Canada Pension Plan Investment Board and Temasek, one of the Singaporean sovereign wealth funds.

The take-private experience left its mark on the GLP founder. Mei talks about the weight of expectation that came with leading so many major investment houses in a deal of such magnitude through such a lengthy process. He admits it was, at times, distracting. Mei remembers his young son expressing concerns: “I remember telling him, but also myself, that everything was going to be fine. He could tell I wouldn’t be happy unless we won. He was probably right. When I learned about the strategic review I knew I wanted to buy the business. I believe in it.”

When it was all over, rather than celebrate, Mei fell ill. “When it was announced by [seller Singaporean sovereign wealth fund] GIC and the company that we’d been selected, I was sick for a whole week. My immune system just crashed.”

Mei regards the whole process as a test of his and his firm’s mettle. He was determined to continue pursuing its objectives irrespective of the outcome and speaks glowingly of the progress GLP made during the period: annual earnings of $794 million, 10 percent higher year-on-year and the highest in the firm’s history. Its fund management platform grew by 23 percent to $43 billion with the launch of European funds and a first Chinese value-added fund.

Milford Track

It is these long-term convictions that have enamoured Mei to the sector’s elite and, critically, seen him earn their trust. Investors in the privatisation have locked in their capital for a minimum of eight years. Many are looking to stay invested for longer, Hillhouse founder Zhang Lei among them. “GLP is a long-term investment,” he says. Hillhouse owned around 8 percent of GLP’s stock when it was listed and has taken a 22 percent position in the take-private. “This is now more than just a real estate company but a platform company with a lot of value to be considered.”

HKMA’s Clara Chan adds: “Even if [Mei] kept to running just a warehouse business in China, that’s a huge play and I’m sure it’d be profitable. But he sees things beyond a five- to eight-year horizon and he starts early. We’ll benefit from him being a first mover.”

Goodwin Gaw, chairman of Hong Kong private equity real estate firm Gaw Capital Partners, is another high-profile fan of Mei. He admits wanting to participate in the privatisation, but his available capital “was too expensive”. He was not surprised such a blue-chip cohort of investors backed the deal, though. “Investors increasingly love out-of-the-box thinking in a world that has become quite disruptive. Hillhouse, Hopu and guys like those breathe this kind of thing. They believed the story and that’s why they helped Ming go private.”

Mei’s networking skills are evidently effective. Lei, Chan and Gaw are industry leaders in their own right and each speaks glowingly of him. Significantly, when asked how they met, often mutual high-profile acquaintances played a part. Flatt and Mei share a strong bond with Seek Ngee Huat, the one-time head of GIC’s real estate business and GLP’s chairman, for example. “He has been very active in establishing networks,” Chan remarks. “People like Bruce Flatt from Brookfield, Goodwin from Gaw Capital, they could be competitors but have become good references for him.”