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Main Capital Markets in Asia

The capital market in Asia is growing rapidly, and this includes venture capital and private equity firms. The region now includes China, which is the 2nd largest economy in the world followed closely by Japan which is the 3rd largest economy. In the region, Japan and Hong Kong are also amongst the top 5 financial exchanges in the world.

In terms of the venture capital markets, it started about 20 years ago, and has grown rapidly over the past 10 years; supported initially by foreign institutions, the industry now includes foreign backed institutions, local institutions, venture capital funds set up by local large enterprises and semi-government and government investment firms.

Here are some markets to consider for your capital raising:

China

China’s venture capital market is growing at a rapid rate, and there is no sign of slowing down. This includes foreign backed investors, particularly those from US, Israel, Germany, UK and some from Middle East. Local venture capital investors, many are set up by executives from Chinese companies that had floated their company through IPO in foreign markets – such as Lenovo, Suntech, Sina, Baidu.com

Japan

Japan has a long, established venture capital industry. It is also the first Asian nation that has been investing in global opportunities actively. Many of its investment firms are backed by conglomerates such as NTT, Honda, Hitachi or Olympus. Japanese investors are particularly active in high tech sectors especially biotechnology, precision engineering, telecommunications and semiconductors.

Hong Kong

Fulled by growth in China, new wealth has been created in China, and this has resulted in creation of new venture capital firms in Hong Kong. Many firms have ties with Chinese investors, although, Hong Kong institutions tend to have specialities in other areas such as infrastructure financing, real estate financing and global market investments.

Singapore

The “Singapore Inc.” strategy is a good example to transform a small economy into a high growth economy. The industry was created by the Government, led by Temasek, and other Government backed companies that invest in opportunities worldwide. Sectors of interest are cleantech, technology, semiconductors and infrastructure financing.

Australia

The industry is changing in the positive way. The Australian venture capital industry has produced many successful global enterprises in mining, technology, commercial services and biotechnology. The Australian venture capital investors primarily invest in technology areas, especially those which have potential to grow into international markets. Mining & Resources areas are another segments that these investors are active as well.

There are many more venture capital markets which is growing and will become quite significant next few years, particularly Korea, India and Taiwan – all 3 markets are showing consistent growth, and also looking to expand their opportunities abroad; particularly into United States.

Over the past 3 years, there had been quite a few transactions made in North America & Europe by Asian VCs and PEs – some were related to start-up companies, others were takeover or merge of established businesses. Infrastructure financing is another area where Asian investors have been growing interest as they provide consistent cash flow opportunities.