Many innovative and forward-looking enterprises in Europe are facing a scarcity of investment funding as a result on the on going financial crisis and the threat of slowing growth and even recession. What many are now beginning to realise is that Asia may well be a better place to pitch for investment funds than is Europe at this point in time. Cash-rich Asian companies may actually become a more likely sources of capital than traditional venture groups.

Overseas expansion by Chinese corporates with ambitions to become multinational enterprises is fueling a wave of overseas investment in joint ventures, equity investments and mergers and acquisitions. For example, China’s largest oil refiner, the Sinopec Group, is taking a 30% stake for $3.5 billion in the Brazilian unit of the Portuguese oil company Galp Energia SA. This is likely to be just the leading edge of the coming wave.

On the sovereign side of things, China is now pulling together a $300 billion dollar sovereign wealth fund. Apparently Beijing is less than enthusiastic about continuing large scale investments in European and US government bonds and figures that real assets in agriculture, energy and green technology are much better than broken promises from goverments around fiscal consolidation. Reuters news agency has reported that the People’s Bank of China plans to create a new vehicle with two funds, one for Europe and one for the United States. This will make China the largest sovereign wealth fund investor in the world.

Until next time…..