Energy is fundamental to economic growth and traditionally has represented the largest segment of Chinese outbound investment. Zhongmen has deep experience in the acquisition and divestiture of oil & gas assets and maintains memberships in a number of leading industry associations. Zhongmen’s Houston office is located at the epicenter of activity involving exploration and production (E&P) companies, oilfield service (OFS) companies, downstream and petrochemical operations, and energy private equity firms.
High-net-worth Chinese investors have been disrupting property markets around the world in recent years from Australia, to London, to New York. Chinese ODI is now entering a new phase in which Chinese institutional investors will play an increasingly large role in the development and acquisition of global real estate. Zhongmen will work with experienced local developers and asset managers to develop or acquire landmark properties for the beneficial ownership of Chinese institutional capital partners.
Chinese regulators issued the first five private banking licenses in 2014 signaling an impending wave of marketization in the Chinese financial sector. Peer-to-peer (P2P) lending platforms and other new methods of private lending have shown early promise in China as a means for savings and loan institutions to provide small business loans while mitigating portfolio risk in the absence of robust private credit market infrastructure. Zhongmen and partner organizations have meaningful experience in financial technology platforms (“fintech”) and believe that China will be a key growth market in this space.
Placement agents focus on maintaining thousands of limited partner relationships around the world in order to successfully raise capital for their private equity fund clients. However, few international placement agents have meaningful relationship with institutional investors in mainland China, in part, because many of these institutions have only just begun to invest abroad and, in part, because the language, cultural, and regulatory challenges have not historically been worth investing time to build the necessary relationships. By contrast, Zhongmen has preexisting relationships with many of the leading institutional investors in China and is well positioned to help premier international PE funds raise capital in China.
The entertainment industry in China is the fastest growing globally and shows no signs of slowing down. Zhongmen has experience working with some of the top content production and distribution companies in the US and in China. We believe that the import and export of culture to and from China will expand rapidly in the near future. We are adept at identifying strategic opportunities and channel partnerships in this space and will work on behalf of international companies seeking to access the China media and entertainment market or those seeking capital from major Chinese media & technology players.
As China’s economy slows due to the difficulty of maintaining growth at a large scale, technology will become an increasingly important source of productivity, allowing Chinese industry participants to produce more with the same volume of inputs by increasing efficiency. Zhongmen has deep experience across many important areas of emerging technology and proactively looks for companies owning IP that would be particularly valuable in China. We will advise a technology owner on how best to form strategic JV partnerships or license arrangements that preserve strong alignment of interests within a technology transfer process.
In order to generate stable, risk-adjusted returns over a long-term time horizon, many Chinese institutions have looked to direct investments in large infrastructure projects. Public private partnerships might add a degree of comfort to making a large investment abroad in that local governments are involved in the project development process along with private actors. Infrastructure funds are another emerging asset class that will likely be attractive to Chinese institutional portfolio investors. Through its international network of project developers and industry advisors, Zhongmen will seek to opportunistically identify large capital spend opportunities in this asset class that might be attractive to Chinese capital partners.
Due to an aging population and with rising incomes, healthcare is booming in China. The demand for quality healthcare will increase dramatically and foreign technology and best practices are likely to play a big role. The first fully foreign-funded hospital was approved for the Shanghai Free Trade Zone in 2014 as a sign that the industry is increasingly open to the participation of foreign firms. The cross-border exchange of knowledge and capital dedicated to the Chinese health care market is now expected to multiply exponentially in the coming years with few limits on growth in sight. We will help best-in-class foreign healthcare service or technology providers identify the best market-entry strategy by selecting Chinese capital and operating partners with complementary domestic operations and optimal market reach.