Idinvest builds bridges in China

THE CHINA SPECIALChina in seven trends

Building bridges

11 years of CIC and Blackstone

Local lowdown: Shanghai

Paris-based manager Idinvest Partners set up its Shanghai outpost last year to provide support for its portfolio companies. Solomon Moos, who handles its corporate development in Asia, says the move is helping foster corporate partnerships in China.

What is Idinvest doing in China?
The Shanghai office has two roles – one is to cover China and the rest of the Asian region as we promote our image as lead European investor for European SMEs. The second is to help the companies we invest in come to China, build connections and help them in their

developments. We chose Shanghai and not Hong Kong, because we believe Shanghai is a window to the future. We wanted to have access to both the investment side and operational development of our companies.

How does a China strategy fit into a European business portfolio?
China has become an important market on the world scene. There’s also been better communications and education about the Chinese market. This has helped entrepreneurs grasp what China is. And as soon as you start understanding better, you don’t fear that much. The cynicism about the Chinese market has waned and Europeans have become more interested.

In some ways you also see that the market is maturing a bit and that is always good. This brings an environment that they are more used to. For example, the legal framework is becoming more efficient and comprehensible. The Chinese government is also aiming to enhance intellectual property laws to provide better protection and to simplify the process of establishing a China diary. In addition, the government rolled out business-friendly incentives.

How do European companies view China and Chinese partnerships?
Ten years ago, European companies’ main international focus was the US. However, for the past three to four years there has been an enormous change in mindset. The US is still very important, but China has become a crucial element of the equation.

A lot of entrepreneurs were working in key innovation sectors such as cloud computing, biotechnology, smart cities and clean technology.  And they were afraid of coming to China because they thought they would lose their IP. Now the mindset has changed radically and there is more confidence in local partners. The market is now more open and friendly towards these partnerships. European companies understand they can’t do it alone, and it’s important to find the right partners in China.

What has changed since setting up your Shanghai outpost in 2016?
We had partners in China before we established an office. With a team on the ground now, we are nurturing relationships with local partners including state-owned companies, listed companies and the big technology firms, as well as institutional investors and government agencies. We already have this network in Europe, and are trying to replicate it in China and Asia.

Where else in Asia do you favour?
Singapore is a market we have already been covering. Singapore has a good financial structure and is an entryway to Asia. Korea is very interesting, too. Investors there are very open and mature in their portfolio diversification strategies. n