China Has Become the Global Second Largest Entity to Invest Overseas
With a total of $220B invested overseas in 2016, China has become the second largest entity in the world for foreign investment. This came from 100% CAGA growth in the immediate three years prior to 2016. Since late 2016, Chinese government issued new regulations and guidelines on Chinese overseas investment. Directionally, there are mainly two principles that have the most impact. First, foreign investment in certain sectors such as real estate, sports and entertainment etc are discouraged or prohibited; Secondly, foreign investments from strategic investors that are making investment with clear strategic rationale in their main business sectors are still encouraged. In 2017, Chinese outbound M&A activity has become more rational, and foreign investment excluding the prohibited sectors are kept similar level as in 2016.
Chinese Investors Have Special Characters
Chinese investors as a new force in global M&A and investment market, possess obvious characters with Pros and Cons in general:
1. Strong motivation both in short and long term
2. Synergy potentials with target company especially in Chinese market
3. Friendly investors mainly relying on local management team to keep running the target company with incentive plan in place
1. Overall inexperienced in M&A transactions; need professional help and hand-holding
2. Slower decision making process especially for some state-owned enterprise
3. Potentially slower government approval if fund is in China
Arbor Lake Capital Is Your Go-To Source to Access Chinese Investors and Market
As one of the most experienced cross-border M&A team in China, we understand the challenge in cross-cultural transactions, and is inspired and highly motivated to find solutions to close any gap to bring a deal together. Our partners are first generation of M&A professionals in China, while all of our investment banking team members are bilingual / bicultural professionals. Our professionalism and years of M&A experience set the base for our strong execution capability.
As a boutique investment bank, entrepreneurship is our gene. All of our projects will be led by our partners at project execution level. Any projects we are engaged will be our highest priority with no compromise on the quality of our work.
Both of our Chinese and international team are one team working as one profit center. No internal conflict of interest or communication barrier.