The fast adoption of new technologies in 5G, artificial intelligence, next generation healthcare and new consumerism, coupled with effective models of government, is driving sustainable growth across China and Southeast Asia.
These markets are set to benefit from three demographic tailwinds, a growing population, a rising workforce, and a low median age.
For Investcorp, these are exciting times. ‘Investcorp is optimistic about the market prospects in China and Southeast Asia,’ said Duncan Zheng, the head of private equity China.
‘China, the second largest economy in the world, has ample room for sustained long-term growth, and Southeast Asia is a vibrant part of the world, that international investors should be focusing on,’ he said.
The firm invests in companies based in China and Southeast Asia in the consumer, healthcare and technology sectors, that are expected to benefit from Asia’s expanding middle class and the digital transformation of these economies.
Since launching its Asia expansion strategy in 2017, Investcorp has committed more than $1bn of capital toward investments in these regions.
Being “first in and first out” in the Covid-19 pandemic, China has exhibited comparatively advantageous resiliency as its societal, fiscal and monetary safety cushions have provided effective tools to absorb the shock and to resume a growth trajectory underpinned by fundamental secular growth drivers.
China’s slew of implemented reform policies is driving sustained growth in the banking, insurance, asset management, semiconductor, sensor and software sectors by allowing majority foreign ownership for the first time.
China’s healthcare sector has exponentially grown recording a 15% CAGR between 2010 and 2019 and is expected to continue to grow at this pace to reach $1.7tn in 2023, a trajectory which is well above the growth of the overall economy.
Investcorp recently acquired minority stakes in Lu Daopei Medical Group, a private hematology specialist medical group and WeDoctor, an online healthcare services company. As part of this transaction, it also launched a new platform dedicated to investing in high-quality Chinese healthcare companies.
The Bahrain-headquartered company also invested in Terminus Technologies, a global artificial intelligence and smart service provider in China.
With this acquisition, Hazem Ben-Gacem, co-CEO of Investcorp said that the group is optimistic about the market development prospect and the growth of China’s AI economy.
The company also acquired a majority ownership in City Super Group, a premium food retailer with chains in Hong Kong and Shanghai.
The alternative investment management firm has also recently expanded its US portfolio to about $2bn, acquiring 32 industrial properties across the midwest.
‘Industrial, logistics and warehouse real estate continues to be a highly attractive, and resilient opportunity for Investcorp. We are confident that these highly leased properties will continue to generate solid cash flows while benefitting from the ongoing growth of e-commerce,’ said Tarek AlMahjoub, managing director for the Dubai and Oman markets.