Current Themes for Strategic Chinese Investors
Everyday RueOne Investments speaks to investors, deal sponsors, asset managers, companies and deal providers from around the world in our effort to help institutional investors, family offices and select individuals find compelling direct investment opportunities. One of the topics that we seem to get asked with great frequency is: What does China want? Or, more specifically, what are Chinese investors thinking and doing with their capital? Based on our conversations with a variety of parties, here are some of our observations on the types of investments that Chinese investors are looking for.
Perhaps the biggest trend we see is that Chinese investors are looking to place their money in assets that can provide some sort of intellectual capital that they can eventually commercialize in China. In other words, as the Chinese economy evolves and shifts, Chinese investors are looking for deal flow that has an intellectual capital payoff or technology component– some aspect that can help China meet its economic and demographic needs, like healthier food; the move towards greater automation; clean technology, and other investments that can help provide jobs for its growing middle class.
For this reason, we’re seeing a good deal of interest in new technology investments where a Chinese company could make a majority equity investment or even an outright acquisition and bring the technology back to China for commercialization. Haier’s acquisition of GE’s home appliance division; the acquisition of Supercell, the Finnish mobile game developer or Lenovo’s acquisition of Motorolo Mobility are just three of many examples. Healthier food is another good example, such as gluten free or organic food products (2013’s Smithfield Food acquisition); or technology that helps grow crop yields or feed more people (think Syngenta, the Swiss pesticide and seed firm or Terex, the manufacturer of agriculture and industrial machinery). Interestingly, anything related to sustainable energy –wind-power, converting waste to fuel, clean tech – we see regular expressions of interest in deals relating to all of these. Finally, robotics and automation are another popular theme. China has now overtaken Japan as the world’s biggest operator of industrial robotics, according to the International Federation of Robotics. Chinese manufacturers, which bought 66,000 of the 240,000 industrial robots sold globally last year, still largely prefer to buy international brands.
This is just some of what we are hearing from our conversations with strategic partners in China. RueOne has spent months building what we consider the most sophisticated network that exists today of investors, deal sponsors and asset managers interested in direct investment in alternatives. Our selection of highly curated direct investment opportunities reflects the depth and breadth of our proprietary network. I invite you to come and find out more about RueOne.