Venture Capital Professionals with Expertise in China in Demand
Venture capital investment in China jumped 87% to $677 million in the third quarter, according to new research. The Chinese government has been encouraging this investment as a way to improve technological innovation and financing for small firms with less access to credit. Venture capital firms are increasingly targeting companies involved in service areas as well as environmental technology and new energy. Executive recruiting firm, A.E. Feldman, says the trend is increasing the number of private equity jobs, investment banking jobs and venture capital jobs and the need for professionals with interest and expertise in China. The increase in overseas investment and M&A is also driving demand for U.S. investment professionals and attorneys with structured finance and capital markets experience.
China has achieved astonishing economic success over the past two decades, with an average annual GDP growth rate of more than 9%. As a result, entrepreneurs in the U.S. are seeking to capitalize on opportunities in the region. Venture capital firms invested $677 million across 59 deals in Mainland China during the third quarter of 2007, according to the China Quarterly Venture Capital Report released by Ernst & Young and Dow Jones VentureOne as reported by AltAssets. This amounts to a 5% jump from the $645 million invested in 76 deals a year ago.
Service-focused deals were among the most popular. In fact, a new quarterly record was set in the business/consumer/retail industry category, with nearly 64% of all capital, or $432 million, invested in the third quarter. The report also states that the bulk of investments in this category went to consumer and business services companies, which attracted a record $335 million in 14 deals. Bob Partridge, Ernst & Young’s China and Far East Venture Capital Advisory Group leader says, “Venture capitalists are attracted to this area by the relatively low capital requirements of services companies, their ability to acquire customers rapidly, and the strong exit valuations they are receiving in both IPOs and M&A transactions,” according to AltAssets.
China’s dramatic economic growth however, has resulted in tremendous consumption of natural resources, low levels of economic efficiency and serious environmental pollution. Now, clean technology has become the third-largest destination for venture capital in China, with $420 million invested in 2006, according to China Economic Review (CER). A.E. Feldman has previously reported that venture capitalists have been upping their stakes in the clean technology sector. Now, CER says China represents one of the most lucrative opportunities in the sector, serving as both a potential manufacturing hub for cleantech exports and as a vast future market.
U.S.-based SVB Financial Group plans to set up a $200 million venture capital fund with two partners to invest in Chinese start-ups according to one of the partners, an affiliate of the Shanghai government, according to Reuters. The fund will target small companies involved in areas such as transportation, logistics, new materials, Internet technology and health care, as well as environmental technology, new energy in China’s Yangtze River Delta.
And speaking of China
The WSJ recently reported that China’s $200 billion sovereign-wealth fund, China Investment Corp, has started a global recruitment push due to a shortage of local professionals with experience investing abroad. CIC opened a web site in both English and Chinese to recruit for finance jobs to be based in Beijing. The WSJ says the jobs range from risk analysts to portfolio managers and public-relations officers. CIC is also seeking fund-managers with overseas education and experience. Portfolio managers are needed to invest in North American, European and Japanese equities and fixed-income products including derivatives.
The WSJ also reports that the sovereign-wealth fund’s managers plan to allocate a third of its $200 billion to investments in global financial markets. The remainder will be used to buy domestic financial-sector assets.
