From a starting capital of 38,000 yuan borrowed in 1993 to a net worth exceeding 40 billion yuan today, Guo Guangchang has taken only 21 years to make his wealth snowball and to build a massive fortune empire.

Guo Guangchang believes that the so-called Chinese dynamism is ostensibly economic, but fundamentally human.

Many people cannot understand the investment logic of Fosun Group, especially after it acquired the wheel of insurance, investing in tourism, consumer goods, and planning to acquire 500 hospitals.

But Guo Guangchang says Fosun's investments are "chaotic in form but not in essence," and "all our investments revolve around two main lines: first, the different stages of China's economic development; second, within these different stages, the improvements in the lifestyle Chinese people need. Our essence is these two."

Guo Guangchang is the helmsman of this capital giant, Fosun Group. In one year, he nearly doubled his wealth.

As of July 4, 2014, Guo Guangchang holds shares directly or indirectly in 11 listed companies, with cumulative personal wealth of 41.034 billion yuan, ranking fourth on the China Wealth Family List, following the Liu Qiangdong family of JD.com and preceding the He Xiangjian family of Midea Group. In the same period last year, his cumulative wealth was 21.419 billion yuan, ranking 11th on the family list that year.

From 38,000 to 40 billion

From a starting capital of 38,000 yuan borrowed in 1993 to a net worth exceeding 40 billion yuan today, Guo Guangchang has taken only 21 years to make his wealth snowball and to build a massive fortune empire.

As the major shareholder of Fosun International, Guo Guangchang holds 45.84%. As of July 4, Fosun International's total market value was 56.7 billion yuan, which is also Guo Guangchang's largest source of wealth. Through his stake in Fosun International, Guo Guangchang has accumulated nearly 26 billion yuan in wealth. Secondly, through holding 18.83% of Fosun Pharma, he gained 8.3 billion yuan in wealth; through holding 23.02% and 23.04% stakes in Shanghai Steel and *ST Nangang respectively, he gained 1.456 billion yuan and 1.429 billion yuan in wealth.

In addition to the above four listed companies, Guo Guangchang has also accumulated more than 3.8 billion yuan in wealth through shareholdings in seven other listed companies. They are Yuyuan Mall (11.46% stake), Hansen Pharmaceutical (3.18% stake), Dian Diagnostics (0.99% stake), Jinhe Industrial (1.98% stake), Zhejiang Yongqiang (1.30% stake), Bailian (1.10% stake), and Minsheng Bank (1.14% stake). Among them, although he only holds 1.14% of Minsheng Bank, it contributed a lot, creating 2.21 billion yuan in wealth for Guo Guangchang.

Guo Guangchang's success is inseparable from several friends who started the business with him right after university graduation: Liang Xinjun, Wang Qunbin, and Fan Wei.

This group, known in the industry as the "best partners," continues to deliver impressive results: over the past 20 years, Fosun has invested in more than 70 projects with an annual return exceeding 30%.

In 1992, when the four pooled 100,000 yuan to create Guangxin Technology Consulting Company (derived from the names of Guo Guangchang and Liang Xinjun, renamed Fosun Technology in 1993), Guo Guangchang was a cadre of the Fudan University Youth League Committee, Liang Xinjun was the research director of the school's Youth League Committee, Wang Qunbin was the secretary of the Youth League branch of the School of Life Sciences, and Fan Wei was the manager of the school's printing club.

If one were to identify a few important time points in Guo Guangchang's wealth creation experience, 1992 is absolutely indispensable. In that year, Deng Xiaoping delivered his Southern Tour speech, prompting Guo Guangchang to abandon his plan to go abroad and decide to start a business.

Years later, recalling this, Guo Guangchang said that Fosun started as a "three-no" enterprise: no capital, no technology, and no talent.

Today, the four close friends who started the business together each take charge of their own areas within Fosun's diversified industries. Guo Guangchang is the soul of the entire group; Liang is vice chairman and vice president, becoming the leader of Fosun's investment and information industries; Wang is general manager of Fosun Industrial, specializing in biomedicine; Fan Wei oversees real estate. Together with Tan Jian, the chairman of the supervisory board of Fosun Group, Liang Xinjun once said that the five people are like five fingers, none of which can be spared. When the five fingers are clenched, they form a fist.

Capital accumulation

In 1994, within two years of starting the business, Guo Guangchang entered the real estate and pharmaceutical industries; after another four years of industrial accumulation, Guo Guangchang and his team began to gradually align the company with capital.

In 1998, Fosun Pharma (formerly Shanghai Fosun Industrial Co., Ltd.) went public and raised 350 million yuan in one go; this was the entrepreneurial and capital accumulation stage of Fosun Group.

After successfully connecting industry with capital, Guo Guangchang and his team began to try to expand industries through the capital chain.

On November 28, 2001, Fosun Investment, which had been established less than a month earlier, signed a controlling stake transfer and custody agreement with Yuyuan Mall. Fosun Investment became the new largest shareholder of Yuyuan Mall, holding 13.25% of the shares, while Yuyuan Mall owned 53.33% of Shanghai Tonghanchun Pharmaceutical Factory. Through the acquisition of Yuyuan Mall, Fosun Investment indirectly controlled Tonghanchun.

As of July 4, 2014, Guo Guangchang's 11.46% stake in Yuyuan Mall had a market value of 1.218 billion yuan.

In 2002, Fosun entered the retail industry; in 2003, it entered the steel industry and securities industry, investing in Ningbo Steel and establishing Nangang United. In 2004, it invested in Zhaojin Mining. In 2007, it invested in the mining industry; in 2011, it entered the insurance industry, establishing Fosun Prudential Life as a joint venture with US Prudential Financial Group; as of June 2012, Fosun Group was involved in pharmaceuticals, real estate, steel, mining, retail, services, and other fields.

As an investment group, the source of funds is very important. But after Fosun Pharma went public in 1998, this problem was not solved.

"After Fosun Pharma went public, I thought the funding problem was solved, and indeed it worked well before 2004, but in reality we encountered two problems. First, the construction of China's capital market system is incomplete, and the cost of financing once is almost the same as the cost of going public once. Second, the Chinese banking system does not support investment-oriented enterprises. For a long period, Chinese banks did not support mergers and acquisitions," Guo Guangchang said. "After 2004, we learned from our painful experience and decided to open up funding channels."

Three years later, in 2007, Fosun International was listed in Hong Kong, building a global financing platform.

Building a capital pool

After Fosun's listing, what route should it take next? This was the question Guo Guangchang had to consider.

Guo Guangchang and his team explored a new business model for Fosun: combining China's dynamism with global resources.

Guo Guangchang has repeatedly emphasized that Fosun's internationalization path is different; it is not simply about acquiring or controlling a top international company, but about leveraging the opportunity of China's market upgrading and the opportunity of Chinese capital going global to establish long-term, win-win partnerships with top international companies.

This new business model of Fosun had a process of experimentation before expansion. The first deal was the investment in Club Med in June 2010, and the second was the investment in Folli Follie in May 2011. When competing with Carlyle and Blackstone, although Fosun's global resource integration capability is not as good as theirs, it can use Fosun's advantages as the core to reversely integrate global resources and help them achieve growth in China.

As an investment group, capital is always the key issue constraining its development. Guo Guangchang faced two choices: own funds or third-party funds. So he established the Prudential Fund with US Prudential, with 100% of the GP (general partner) managed by Fosun. But Guo Guangchang does not think the fund model fits Fosun's investment strategy.

The best model is to manage one's own money, but the amount is not enough. What to do?

On any occasion, Guo Guangchang has never concealed his ambition to move closer to Warren Buffett. This time is no exception; he wants to learn from Buffett and build his second wheel, a comprehensive financial group centered on insurance.

In 2007, Fosun acquired a stake in Yong'an Property Insurance. In 2011, Fosun established Fosun Prudential Life as a joint venture with US Prudential Financial Group. On January 9, 2013, Dingrui Reinsurance Company, a joint venture between Fosun and IFC, a member of the World Bank Group, officially opened in Hong Kong. At this point, Fosun Group completed its insurance investment layout driven by the "troika" of property insurance, life insurance, and reinsurance.

More importantly, in May 2014, Fosun officially completed the acquisition of 80% of the shares of the insurance group under Caixa Geral de Depósitos.

"Fosun now has about 300 billion yuan in assets, of which 30%—40% come from insurance," Guo Guangchang said in May 2014.