Saturday, January 21, 2012

Chinese group to invest in Kiwi startups

A group of well-heeled Chinese business people with connections to New Zealand is getting together to invest in promising Kiwi companies.

New Zealand's first Chinese angel investment network hopes to start operating in February.

It's the brainchild of the Ice Angels, the private investment group set up by Auckland University's Icehouse business incubator in 2003 and which is now the largest in Australasia.

Ice Angels advisory board member Brent Ogilvie said they looked around at their membership and realised they were predominantly New Zealand Caucasian.

''There is obvious wealth among overseas Chinese with some connection to New Zealand.

''We think there's an opportunity and we have done some soundings with key individuals in the Chinese community in New Zealand to form a subgroup.''

The Ice Angels have secured the support of Auckland City's economic development agency ATEED, which will fund a Mandarin-speaking intern to provide administrative and language support to the fledgling group.

It has enlisted the help of Auckland University to find a suitable post-graduate student.

The ATEED connection will also offer access to prestigious meeting room facilities such as at the Town Hall - something that Chinese business people consider important, Ogilvie said.

The Ice Angels themselves would provide full support. Each member of the Chinese group would be paired with an advisory board member, and the network would be offered a pre-qualified deal flow.

Only businesses that had already received money from organisations such as Ogilvie's investment firm Pacific Channel or funds accredited to the governement's Venture Investment Fund would be put before the group.

Given that it was likely not all members would be in the country at the same time the group was aiming for a total membership of around 12, Ogilvie said.

Angel investing was done in China but the networks were not as large.

But the Chinese believed in growing businesses through relationships. ''So in many ways they have been doing angel investing for a long time.''

Group member Kenneth Leong said Kiwi businesses were crying out for funds.

''There is a huge pool of untapped capital right under our noses.''
Chinese business people had an appetite for New Zealand assets but many held their funds here in bank deposits or property.

They were prepared to take on risk. Go to the high rollers' room at the casino at 5pm on any given day and 95 per cent of the patrons will be Chinese, he joked.
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''What's lacking is a platform for Chinese investors to connect with New Zealand businesses.''

Other forums had been too structured, but it was hoped an informal network of angel investors would enable deals to occur organically, Leong said.

- © Fairfax NZ News

Last updated 05:00 15/12/2011

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