March 16, 2017 / 5:40 AM / 10 months ago

UPDATE 1-Chinese group launches fund in Australia, eyes infrastructure

(Updates to add pictures)

MELBOURNE, March 16 (Reuters) - Chinese group, the Global CEO Fortune Club, on Thursday launched its first overseas fund with an aim to invest in Australian infrastructure projects.

Foreign investment in Australian infrastructure has become a contentious issue since the 2015 sale of the Port of Darwin to Chinese government-affiliated interests sparked a backlash over the security implications and even a rebuke from U.S. government officials.

But the Fortune Club expects to find opportunities for public-private partnerships from its base in Melbourne as Australian states ramp up construction of roads, train lines and port regeneration to offset weaker mining investment.

A group of 25 investors from the 800-strong Fortune Club - all alumni from Shanghai’s Jiao Tong university - has been touring the southeastern state of Victoria this week as guests of the state government, looking for investment opportunities.

“We have the capital, we have the resources, and we have the capacity to help build Melbourne and Victoria if there are major important projects,” Fortune Club Chairman Ye Hongxian told Reuters through an interpreter.

“As long as the project is good, we can fund it. This group of 25 has 20 billion yuan ($2.90 billion) in assets that we can use to support projects,” he added.

The group expects tourism around Victoria’s scenic Great Ocean Road and the airport of Avalon, which is between Melbourne and the city of Geelong, to offer development opportunities.

“Australia has beautiful sceneries and Melbourne has six times in a row been ranked the world’s most liveable city. The open and multicultural environment attracts us to Melbourne,” Chairman Ye said.

The group - which also plans to launch similar ventures in the United States, Japan and Sri Lanka - is waiting for Victoria to give a list of investment opportunities that may offer a partnership potential in the Australian state.

“As for Avalon airport, we are very keen to look at what a partnership could look like,” Ye said. The club is affiliated with China’s low-cost private airline Shanghai Jixiang.

The Fortune Club is not directly linked to Beijing’s “One Belt One Road” policy, which is aimed more towards development along the Old Silk Road that brushes through the north of Australia, he added.

Australia has said it will weigh long-term geopolitical considerations when it vets proposals by foreigners to buy critical infrastructure assets.

Australia rejected bids from state-owned State Grid Corp of China and Hong Kong group Cheung Kong Infrastructure Holdings Ltd for a large power grid, Ausgrid, in 2016, citing unspecified national security concerns.

$1 = 6.8944 Chinese yuan renminbi Reporting by Melanie Burton; Editing by Himani Sarkar

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