The razzle dazzle of Hollywood film making with stars including Matthew McConaughey and Julia Roberts is a long way from the oil and gas fields owned by Santos in Australia but Chinese private equity firm Hony Capital casts its net wide. 
Project Merino, the secret code name for Hony's $700 million investment in the ailing Santos, was its first big purchase in Australia and came just a few weeks after it was one of the final bidders in the sale process for Melbourne-based vitamins firm Swisse Wellness, which was ultimately sold to Hong Kong's Biostime International for an eye-popping $1.67 billion on   September 16.
Hony, which has its head office in Beijing, is spearheaded by the entrepreneurial John Zhao who is still the president of the $10.4 billion firm after founding it in 2003 as an offshoot of China's Legend Holdings, the holding company for the world's biggest personal computer maker, Lenovo. While Lenovo is notionally a private company it retains strong links to China's Communist Party. Lenovo was founded by Liu Chuanzhi, who was previously a member of China's National People's Congress, a rubber stamp body that serves as China's Parliament. He remains Lenovo's chairman.
One of the biggest private equity firms in China, Hony has powerful backers including China Life Insurance, Singapore's Temasek, the Stanford University Fund, Goldman Sachs and China's massive National Social Security Fund. Another investor in its funds is the Canada Pension Plan Investment Board, which is also making a joint takeover tilt for Australian ports and rail company Asciano as an investor alongside Chris Corrigan's Qube.
Hony started getting serious about an investment in Santos in early   September with talks between advisers and the companies being held in Sydney and Hong Kong. The code name for the Hony talks was dubbed Project Merino because 2015 is the Year of the Sheep in China and the Santos board and advisers from Lazard and Deutsche Bank were seeking a premium to the share price for a placement, in line with the premium nature of Australia's prized high-quality wool from the Merino.
Hony's average entry price across its Santos investment is $5.71 per share but the $500 million placement of 73.53 million shares to Hony is being done at $6.80 a share, 15 per cent higher than the $5.91 last closing price of Santos before a trading halt. A Hony affiliate called United Faith Ventures holds the Santos placement shares.
Hony has increasingly been looking outside of China for investments and last year paid $1.9 billion for the United Kingdom restaurant chain Pizza Express but it has also been ploughing funds into the Hollywood movie studio, STX Entertainment. STX is aiming to put a serious dent into powerhouses Warner Bros, Disney and Universal Studios. Hony invested in STX alongside United States private equity firm TPG Capital last year and is aiming for big things from the studio, which is run by Hollywood producer Robert Simonds as he targets good investment returns from medium-sized movie budgets of between $US20 million ($28 billion) and $US80 million.
Movies starring Matthew McConaughey and Julia Roberts are early projects for STX. Mr Simonds has a solid track record as a producer of movies including Cheaper By The Dozen starring Steve Martin and The Waterboy with Adam Sandler.