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Sunday, March 19, 2017

How much notice should we take of rise in Asian tech investment in Europe?

Photo: Kathryn Cave
Kathryn Cave, Editor at IDG Connect notes, How much notice should we take of rise in Asian tech investment in Europe? 
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Photo: IDG Connect

Earlier this year Magister Advisors, a specialist investment bank focusing on exit preparation, M&A and alternative financings, suggested that while Asian capital into European tech reached an all-time high of $58B last year, it will double this year in the wake of the US political climate. The firm stated that “2017 will be a watershed year for Asian investment into European tech” adding that the most active recipient was likely to be the UK.
 
I contacted Magister Advisors for further comment and nobody got back to me. However, plenty of other individuals in currency and investment firms were happy to voice an an opinion on the likelihood of this trend.  
 
Sino-British entrepreneur and executive chairman of Gate Ventures, Dr Johnny Hon, believes: “The analysis may prove to be correct but it is too early to say.
 
“In general terms, Asian technology investors will be looking to both the European and North American markets. If US relations with China deteriorate markedly, which is a possibility, then this will certainly affect investment from that country. However, it is also possible that Chinese investors may seek to get behind Trump's domestic economic agenda for mutual benefit,” he says.
 
Chris Lewis, partner at M&A firm Results International stresses that “this is not a new theme. He says “we have been seeing this in our business for several years across the technology, marcomms and healthcare sectors.”
 
This point is also taken up by Mike Laven, CEO of payments platform Currencycloud – which received $18M investment from Japanese firm Rakuten back in 2015:
 
“For the last few years, Asian investors have been showing a keen interest in European tech – and fintech in particular. China tripled its fintech investment in 2016, meanwhile the Singapore and Hong Kong governments have made progressive regulatory changes to encourage fintech development. With Asia looking to pick up the pace in fintech, it stands to reason that the UK – the global leader in this sector – would stand out as an investment of choice.”
 
Sino-British entrepreneur and executive chairman of Gate Ventures, Dr Johnny Hon, partially agrees with conclusions. “What seems clear is that technology investment and development globally will be increasingly driven by Asian funds and entrepreneurs. This will help create a tendency to diversify from, but not exclude the US, and invest more in Europe.
 
“Openness to foreign investment in both Europe and the USA is necessary to properly tap into Asian investment, but this will have to be squared with the populist backlash against globalisation currently making waves in the developed economies. Economics will therefore continue to be the plaything of politics for the present, leading to unpredictable outcomes,” he adds.
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Source: IDG Connect


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