Asia investors take stock
A regulatory crackdown, ongoing pandemic disruption and an uncertain macroeconomic environment has some investors rethinking their approach to China, write Alex Lynn and Amy Carroll.
Beijing’s 2008 Olympics coincided with what some consider to be the peak of China-mania. "In the period after the global financial crisis, everyone wanted access to the China growth story," says Doug Coulter, partner and head of private equity Asia-Pacific at LGT Capital Partners.
China’s private equity outlook feels a little less certain in recent years, with geopolitical tensions, ongoing pandemic disruption and macroeconomic uncertainty on a global basis all contributing to hesitancy among some corners of the investor landscape.
"While investors have not given up on China, many are more cautious and have pressed pause, so to speak," Coulter says. "We are extremely lucky to have closed our Asia fund last year. We have seen investor interest for anything China-related continue to slow."
Heath Zarin, founder, chairman and CEO of EmergeVest, adds that LPs have concerns around the restructuring of the global economy and, in particular, the role that China is likely to play. "There is a greater wariness regarding China than I have seen since first coming to the region in 2005," he explains. "We have seen this issue of a decoupling of China and the US raised intermittently over the years, but it does feel more real and more intense this time around."
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