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Investment in China PIPEs grows on Alibaba’s coattails
By Bill Meagher   Updated 07:45 PM, Sep-09-2014 ET
Fueled by the anticipated initial public offering of Alibaba Group Holding Ltd., a renewed wave of investor interest has swept into U.S.-registered Chinese companies.
Such companies have raised $4.43 billion in 35 private-investment-in-public-equity transactions this year, compared to $276.8 million in 13 PIPEs last year, according to PrivateRaise, The Deal’s data service that tracks the PIPE market. Those figures exclude transactions that raised less than $1 million.
“Everything ultimately comes back to Alibaba,” said Peter Fuhrman, CEO of China First Capital, an investment bank in Shenzhen, China.
Alibaba’s imminent IPO has increased investor awareness that all things related to Internet shopping in China could be a “money-spinner,” Fuhrman said in an e-mail.
“Pretty much all the China IPOs in US this past 12 months have been internet-related. Now comes the Daddy of them all,” he wrote. “This perception of a boom of titanic proportions in online shopping in China is well-founded. The challenge for US investors is whether the companies that have gone public, with exception of Alibaba and to a lesser extent Jingdong will be able to scale up and make real money over time in China.”
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