What's Jack Ma, founder and executive chairman of Alibaba Group Holding Ltd.(BABA), worth? As of August 2017, around $37.4 billion, according to Forbes. The publication had named him the 33rd richest person in the world and 8th richest in the tech industry in 2016, back when his net worth was just $34 billion. And that was a jump from the $20.5 billion he had following the initial public offering (IPO) of Alibaba on the New York Stock Exchange in September 2014. (That $25 billion IPO was the largest in history.)
Much of Ma’s wealth is linked to Alibaba (with a 7.8% stake, he has the third-largest controlling interest in the company) and its subsidiaries. Ma is constantly diversifying Alibaba through organic growth and acquisition. (The firm's roots date back to 1995, when Ma and his wife started a site-creating company called China Yellow Pages. Less than five years later, Ma he co-founded Alibaba with 17 friends in Hangzhou.) Alibaba’s holdings now include outright ownership and or important ownership stakes in a movie studio, venture capital funds, Yahoo! China, healthcare technology makers, internet messaging and voice apps, supply chain management companies, taxi-hailing app services, video streaming sites, social media apps and online clothing retailers.
When a person makes Forbes’ The World’s Billionaires list, investors are naturally interested in what he or she is investing in.
With a wide array of investments spread out in a number of different companies and sectors, Ma’s web of deals and diversification are often likened to that of Warren Buffett of Berkshire Hathaway Inc. (NYSE: BRK) fame. Ma is a proliferate investor, who is not shy of financing all stages of a venture's progression, from seed funding to established company. However, most of his investing is done through Yunfeng Capital, his official and personally controlled wealth management firm, or through shell companies that attempt to obscure his involvement.
Ma created Yunfeng Capital with four other associates, mainly from his hometown, in 2010. The five principals are known as the “Zhejiang Gang,” referring to the province where they were born. A venture capital firm, Yunfeng is the major investment arm for Ma’s personal fortune. It invests in early-stage companies within a number of industries, almost all of which are located in China. The holdings are so diverse, it may be easier to describe the sectors in China in which Ma is not personally invested, rather than all the areas that he is. Sectors Yunfeng invests in include health care (it put $142 million in China Resources Wandong Medical Equipment Co. Ltd. (Shanghai: 600055.SS), a maker of medical devices, for example), insurance ($1.7 billion worth of shares in China Taiping Insurance Holdings Company Limited (HKSE: 0966.HK)), mass media, clean energy, consumer goods, finance (a 56% stake in REORIENT Group Limited (HKSE: 0376.HK), a mid-cap brokerage located in Hong Kong), technology and internet products and services.
Not all of Ma's funds are invested in public shares; a large portion of his wealth is invested privately, through connections and holding companies. One private investment of Ma includes Star Capital, a real estate fund that is majority-controlled by Fosun International. A major part of Alibaba’s financial services businesses, including Alipay, is overseen by another holding company that is controlled by Ma and other investors.
A recent deal that put $1 billion of Alibaba’s capital up to purchase a 20% stake in Wasu Media, (Shenzhen: 000156.SZ) may look like a straightforward corporate transaction. However, a closer look at the actual structuring reveals somewhat complex arrangement. The Hangzhou Yunxi Investment Partnership Enterprise, which made the investment on behalf of its three partners, including Ma, is controlled by three separate entities. One of those, Hangzhou Yun Huang Investment Management, is 99% controlled by Ma, with the other 1% owned by Simon Xie. The $1 billion loan was made to Xie from Alibaba, which was then invested into the Yunxi partnership for the purchase of the Wasu shares. Taking a very circuitous route, Ma was investing personally in Wasu.
Interest in Sports and Entertainment
The Huayi Brothers (Shenzhen: 300027.SZ) entertainment company, originally formed in 1994, is another personal investment for Ma. Yunfeng, Chinese Internet giant Tencent Holdings Limited (OTC: TCTZF) and Huayi have purchased controlling interests in it through an empty shell corporation called China Jiuhao Health Industry Corporation Limited (HKSE: 0419.HK). There are rumors that they plan to turn it into a major Hollywood movie producer in the coming years, with plans to produce 10 live-action films and three animated feature-length films.
Yunfeng also recently made investments in a new sports rights operation named LeTV Sports, with an initial funding round that included $129 million. The operation is being nicknamed China’s Netflix. There are also rumors that Netflix, Inc. (NASDAQ: NFLX) itself is considering partnering with Wasu in order to enter the Chinese content market.
Jack Ma's Causes
Ma is a charismatic, flamboyant and energetic leader, and his influence in business and leadership has been recognized by various organizations. He was named one of the world’s most influential people by Time Magazine in 2009, Businessperson of the Year in 2007 by Businessweek, Asia’s Heroes of Philanthropy in 2010 by Forbes Asia, one of 30 world’s best CEOs by Barron’s in 2008 and in 2001, he made the list of young global leaders by the World Economic Forum.
His influence has transcended business into social causes, primarily environmental ones. Ma has been a board member of The Nature Conservancy in China since 2010. He has taken on the shark fishing industry, pledging to end the consumption of shark fin dishes, and working to bring about the end of trading fins and other shark-based products on Alibaba. A small (but meaningful in absolute value) percentage of Alibaba’s profits are allocated to fund environmental causes. Ma has also begun sounding the alarm bells (albeit cautiously) on the environmental impact of China's fast-developing industrial economy. He is advocating for China to take steps to further diversify its economy and reduce its reliance on manufacturing.
Ma is an active advocate for women’s fair treatment and advancement in business. Within Alibaba, approximately 47% of the employees are women, and 33% of senior management are women, he has asserted, adding proudly, "We have many women CEOs, CFOs, directors and so on."
He also aims to use his influence to encourage and advance fledging business owners. "For the rest of my life, I want to encourage entrepreneurship, to help more small and midsize enterprises," he has stated. He is also flirting with the idea of returning to his academic roots – he is a graduate of Hangzhou Teacher's Institute – someday: "I want to go back to school because I was trained to be a school teacher. I have been doing business for 15 years, and I think most of the things that I learned from the business school are not correct – I want to go back and share with others."
Expanding Access to Capital
Ma also suggests that various Alibaba's ventures have a philanthropic bent. In 2016, he coined the term "TechFin" as a way to not only set the company's payment platform Alipay apart from it competitors, but to underscore the company's goal of providing young people, small companies and poor nations access to capital.
He wants Alibaba, already the world's largest e-commerce platform, to also be the go-to financier for emerging markets. And the company's Alipay e-wallet service, which boasts 450 million registered users, is going to serve as the backbone for Ma's payment platform expansion efforts.
“Fintech takes the original financial system and improves its technology,” said Ma during Friday’s China Conference organized by the South China Morning Post (SCMP). “TechFin is to rebuild the system with technology. What we want to do is to solve the problem of a lack of inclusiveness.”
The Post, a publication owned by Alibaba, quoted Ma as saying, "Everyone should have a bank account." To that end, Alibaba’s financial services affiliate Ant Financial Services Group (which manages Alipay) has begun to focus on emerging markets such as India, the Philippines and Malaysia – areas that are considered underserved, compared to established markets like Europe and the United States. Ant also runs Yu’E Bao, a four-year-old money market fund that offers higher interest on savings and greater liquidity than many of China's traditional banks.
As to how Alipay and the concept of "TechFin" stands against existing payment platforms, Ma described his ambition as having less about competition and more about solving a problem. “It’s not a business model competition ... getting a business model is simple if you really solve a big problem and create value,” the Post quoted him as saying. “In India, we have over 150 million users who can run mobile payments within 20 months. This [enabling the poor to have bank accounts] is something we feel proud of.”