Singapore’s GIC Sees China On Par With Silicon Valley For Tech Investments
China Is Fast Closing The Technology Gap With The West
One of the largest public wealth funds in the world (ranked 13th) that manages over $398 billion, Singapore's GIC Pte thinks China is just as promising a place as Silicon Valley to set their sights on, in the search for the next huge tech innovation to invest in. In a Bloomberg News interview last Tuesday, head of the technology investment group at GIC, Jeremy Kranz commented, “It’s so impressive in China that we give it equal attention in terms of our team”.
After previously making bets on Alibaba Group Holding Ltd. and Xiaomi Corp. that yielded huge profits, GIC is eyeing to invest in more promising Chinese tech companies next. Prior to Alibaba’s 2014 IPO, GIC had made an investment in the company and has since seen the stock almost triple. Also a major backer of the smartphone maker Xiaomi that plans to go public this year with a valuation of as much as $100 billion, “[GIC] thinks that post-IPO, the returns continue to compound. The fund has the flexibility to hold the stock long-term,” said Kranz in the same interview.
Through its experience with Xiaomi, GIC observed that China had become one of the best hubs for building innovative consumer products that optimise hardware, software and a complex supply chain. This in turn has allowed these Chinese companies to deliver high quality products at a lower cost, said Kranz. “We saw this for the first time at scale with Xiaomi,’’ he said. “Today, it’s in your interest to do that in Shenzhen rather than in Palo Alto.”
As the value of GIC’s technology assets continue to grow, the fund seeks insight into disruptive innovations that may shape the future. GIC’s investments in technology, media and telecommunications rose significantly to 20 percent of all equity investments last year from 3 percent in 2009, according to data from the London-based Sovereign Wealth Center show.