New $100m Ireland-China fund aims to capture a further $200m for Irish tech firms
Summit Bridge Capital, a joint venture between NPRF and Chinese sovereign wealth fund, to invest in Irish exporters
Tánaiste Eamon Gilmore with Raymond Yang, managing director of WestSummit Capital, and Elaine Coughlan, a general partner with Atlantic Bridge, at yesterday’s National Pension Reserve Fund announcement. Photograph: David Sleator/The Irish Times Tánaiste Eamon Gilmore with Raymond Yang, managing director of WestSummit Capital, and Elaine Coughlan, a general partner with Atlantic Bridge, at yesterday’s National Pension Reserve Fund announcement.
Summit Bridge Capital, a new $100 million joint-venture investment fund between Ireland and China, is aiming to attract up to $200 million in further investment from other funds to plough into Irish technology companies looking to break into the Chinese export market. The fund, launched yesterday with $50 million injections from the National Pension Reserve Fund (NPRF) and the China Investment Corporation (CIC), expects to take minority stakes in up to 15 established Irish technology companies over the next three-to-five years. It will be co-managed by Dublin firm Atlantic Bridge Capital and Chinese outfit WestSummit Capital. Elaine Coughlan, a general partner with Atlantic, said the new fund would look to co-invest in Irish exporters to China with other international funds. “A $100 million fund could typically bring in extra investors of between $100 million and $200 million.
The fund won’t itself borrow to invest, but it would be leveraged in the sense that its cash is used to attract more equity,” said Ms Coughlan. She said the fund already had a “solid pipeline” of five or six potential investments lined up, because Atlantic had worked on establishing the fund since it was first mooted in 2012. It hopes to make its first investment in the first half of the year. Ms Coughlan said it would focus on established technology companies with growth potential that are “market ready” for China. “We won’t just look at traditional technology and software companies. We have also looked at sectors that are particularly suitable for exporting into China, such as agri-tech, food-tech, and precision engineering.” CIC is one of the largest sovereign wealth funds in the world, with about $580 billion of assets – two-and-a-half times the size of the Irish economy – under management.
The Government and the NPRF have been in negotiations with CIC to launch the fund for about two years, dating back roughly to the time the then Chinese vice-premier Xi Xinping visited the State. At the fund’s launch in Dublin yesterday, the Minister for Finance, Michael Noonan, said its establishment was part of a Government strategy to draw more non-bank sources of capital for Irish companies. “In the US, 70 per cent of funding for the economy comes from non-bank sources. We identified this as a problem in the Irish economy,” said the minister. He said the NPRF-CIC joint venture was part of a strategy to deepen economic links between the two countries, which he hoped would ultimately lead to the State tapping China to buy Irish sovereign bonds. “A lot of Asian funds would like to invest in Irish government bonds, but they need all the ratings agencies to have Ireland at investment grade first. But I have no doubt that, before too long, there will be funds flowing from China to the Irish sovereign.”