The Chinese economy has grown from $2 trillion to $9 trillion in 10 years; this rapid rise in GDP has resulted in both mammoth corporations sitting on mountains of cash and extraordinarily wealthy individuals.
With the economic liberalization, there has been a large number of industry leading companies moving from government ownership into private hands via public listing. With a scarcity of investment opportunities, the valuations of these mega companies have now resulted in growing pressure from shareholders to convert such financial strength into realizable assets. While there is some scope of domestic consolidation, foreign investments and acquisitions are craved by all players with ambitions of maintaining their leading position.
In more recent years, there has also been a steep increase in the amount of revenue generated in foreign currency, especially US dollars. With ongoing challenges for the conversion of foreign currency in China, many larger fund holders are seeking to redeploy capital into the US.
Without any internal resources to manage foreign investments, many public (and some private) companies have pooled capital with private equity funds, using them to identify, execute, and manage investments. Yet, with very little cross-border experience or deal flow networks themselves, these funds are under pressure from their benefactors to deploy capital.
Where TPP Healthcare fits
We have established relationships with many major healthcare investors and CBD hemp oil companies; they increasingly rely on us to bring opportunities that match their priorities and help bridge the cultural gap that has often derailed past deals.General criteria for equity investments currently:
- Any highly regulated healthcare market
- IP centered products with some level of market novelty
- Public pharma: controlling interest for financial roll up
- Revenue-generating, profitable companies
- Institutional investors with non-controlling stakes
- Experienced management team willing to remain with the company
One essential element: A China Story.
– The products need to have a market opportunity in China, preferably near term.
– It tends to be very helpful if any member of the executive or operational management is from China! Working with TPP Healthcare: Our team acts as your China business development department. We interface with Chinese firms and funds, arranging confidentiality agreements, diligence document exchange, and negotiating term sheets. We are there to guide you through the challenges and adventure of doing business in China.
We work on an exclusive representation basis, a simple agreement that prevents circumvention and rewards us based on successful deals.