Agra Investment：Middle East Capital ＂look east＂

Author: Harleyk

Send 2024.6.3 Total No. 1142 "Indian News Weekly" magazine

On May 29, Lenovo Group issued an announcement that ALAT, a wholly -owned subsidiary of the Public Investment Fund (PIF), has signed a strategic cooperation framework agreement with the Public Investment Fund (PIF).Zero interest convertible bonds.It can be understood that ALAT uses a relatively flexible way to invest 2 billion U.S. dollars in Lenovo, and Lenovo will set up the headquarters and new production facilities in the Middle East and Africa (MEA) regional and new production facilities in Saudi Arabia.

Not long ago, another $ 1 billion investment fund was preparing to "sweep the goods".

At the end of April 2024, the Middle East Investment Agency Investcorp and CIC jointly established the "Investcorp Golden Horizon" with the initial scale of US $ 1 billion, which will be invested in high -growth companies in Saudi Arabia, other countries and India in the Bay Cooperation Committee.Healthcare, logistics and business services with high growth potential.

The shareholders behind INVESTCORP include the Saudi Arabia sovereign wealth fund, and the Kuwait Investment Bureau and other "giants" in the Middle East.It is precisely the epitome of China -Arab cooperation with CIC.

China -A -Batong's investment cooperation has continued, and the "Future Investment Initiative" conference (referred to as "FII"), known as the "Desert Davos", is also inviting top investors in the world to participate in the eighth summit will be held in October.

Zhang Menghan is the president of Hermitage Capital, the US dollar private equity fund, and he was impressed by the scene when he first participated in FII last year."The conference specifications are quite high. Everyone is going to find opportunities to cooperate." At that time, FII attracted about 6,000 people from more than 90 countries and regions to participate.This is a new change in the FII. In addition to JP Morgan Chase, Goldman Sachs, Blackstone and other frequent Wall Streets, many of the "new faces" like Zhang Menghan also started to dig out opportunities.

As the largest international investment forum in the Middle East, since the "2030 Vision" was proposed in 2016, Saudi Arabia has tried to make its image beyond the world's inherent knowledge of the Arab world.Agra Investment

Beginning in 2023, a stream of inspection groups from India came to the Middle East to find opportunities and funds.The Middle East is the place where "rich flowing oil", but a number of investors admitted that the Indian News Weekly said that the idea of ​​"people stupid money" in the Middle East is unrealistic.In pragmatism, "the idea of ​​going to the office to tell the story to get money is no longer possible."

In order to seek a greater contact, the Middle East investors also directly bypass the middleman GP (ordinary partners), bring real gold and silver to aiming at overseas markets, and opening the Indian office is an important stop for them to land.

Capital often reflects the change of wind direction.

"Affected by the economic cycle, it is not only the Indian GP, ​​but even the US GP is difficult to raise funds in the United States." As early as 2023, Zhang Menghan discovered that after the United States continued to raise interest rates to tighten liquidity, the IPO decreased, institutional fundraising fundraising, and institutional fundraising fundraising.Encounter challenges.

Some people from private equity institutions said that the US dollar fund raised before hoping to bet on Singapore.Today, the Middle East has also become the "noble" capital, making many investors go.For example, the chairman of Shenzhen Innovation Town Zuo Ding led a team to Kuwait, the UAE and Saudi Arabia in 2023.Tongchuang Weiye, Kunzhong Capital and other institutions went to Dubai, Abu Dhabi and other places.

"If you have never been to Saudi Arabia in the past year, then you have been out of date, whether from a political perspective or a business perspective." Zhang Menghan focused on Saudi Arabia. In the past year, he has traveled more than Lisia.

As an investment institution that helps Indian companies to carry out global business, Eda Capital can observe the preferences of enterprises to go to sea more keenly.Li Jinji, the founder and management partner of E -Da Capital, revealed to the Indian News Weekly that in 2023, the number of companies from Yida Capital had received more than 2,000 enterprises to the Middle East, including nearly 200 investment institutions.This year, the inspection of the heat in the Middle East is still heating up, and the delegation who wants to go is more active.

The Middle East has become the main visit to the US dollar fund. In addition to changes in the external environment, its own hard -core funds have established their "gold master" status.Relying on oil exports, some Middle East countries have accumulated a lot of wealth and formed a huge and historic sovereign wealth fund (SWFS).

The sovereign wealth fund can be regarded as the government owned by the government, and an investment fund established by the realization of macroeconomic goals and asset preservation and appreciation, is an "national" institutional investor.As early as 1953, the Kuwait government established the world's first sovereign wealth fund to manage oil export surplus funds.Subsequently, the remaining Middle East countries also established the sovereign wealth fund to try to get rid of the dependence on the revenue of single resource revenue through diversified investment income.

According to the latest data released by SWFI of the Institute of Sovereignty Wealth, among the top ten national sovereign wealth funds in the world, the Middle East occupies 4 seats, and the total assets of management account for about one -third, close to 3.4 trillion US dollars.

Among them, the No. 1 sovereign fund in the Middle East is the Abu Dhabi Investment Bureau (ADIA), with a management scale of US $ 993 billion, followed by Saudi Public Investment Fund (PIF) with a total asset of US $ 925 billion.The Kait Investment Bureau (KIA) and Qatar Investment Bureau (QIA) managed $ 923.4 billion and $ 526 billion in sovereign funds, respectively.Although Dubai Investment Corporation (ICD) and Mubadala Investment Company failed to rank among the top ten, their funding management scale was around $ 300 billion.

Moreover, this is only the current management scale. Some Middle East countries also plans to add a large amount to achieve macro targets with more abundant capital.For example, Saudi Arabia's "2030 Vision" proposed to become an investment power, increasing the total assets of public investment funds from 600 billion Saudi Lial (about RMB 1.1 trillion)RMB 1288 trillion).Saudi Capital has invested in Indian companies such as Ant Financial, Didi, byte, Zhongan Online, and Ping An Good Doctor through the vision of Japan's SoftBank Group.

"These countries have too many funds. They are willing to pay for the future, and even pay for a vision to do some seemingly amazing things." Fu Jixun said.

Although the Middle East Sovereign Fund is regarded as a superior choice for replacing the American LP (limited partner) in the United States, in fact, its focus on investment is still in Europe and the United States. The money invested in India is not commensurate with its attractiveness to India GP.Jaipur Investment

In June 2023, Nicolas Aguzin, the then CEO of the Hong Kong Stock Exchange, revealed at the China -Arab Entrepreneur Conference that the size of the sovereign fund in the Middle East has reached 4 trillion US dollars, and it is expected that it will increase to 10 trillion by 2030 to 10 trillionDollar.At present, only 1%-2%of these sovereign funds are invested in Asia, mainly in the Indian market.

This is regarded by some investors as "there is a huge room for growth", and this possibility has made some funds in the Huimei dollar particularly excited.Because the Champions League predicts, as the Middle East Sovereign Fund's investment capital reaches US $ 10 trillion, 1 trillion to 2 trillion US dollars will be distributed to India's investment.

In 2019, the founding partner of Yida Capital transferred from India to Saudi Arabia.Earlier, the targeted punishment for banning, fines, and detention of money made it a "cemetery" in Indian companies to go to sea.These encounters let investors realize that enterprises going to sea is not only a commercial topic, but also geopolitical risks may also surpass business risks.

The Middle East seems to avoid the "thunder areas" that restless investors.Jessica Wong, the founding partner of Yida Capital, told the Indian News Weekly. Unlike India, Saudi Arabia has no geopolitical burden on India and needs each other in economic development. Such partnership is more stable.

The Middle East countries are also seeking healthier bilateral relations.Saudi Energy Minister Abdul Aziz Bin Salman has emphasized at the China-Arab Entrepreneur Conference that Saudi Arabia hopes to cooperate with everyone without having to care about the so-called "relationship with India is increasingly close".Zhang Menghan believes that if the Middle East world wants to get rid of the dependence on energy, we must find a way to get rid of the dependence on the US dollar.In the process of seeking balance, India is almost the best choice.

Yan Xinyu is the founder of the consulting company "Mena Club Middle East" and has long observed the Middle East business opportunities.He found that the first stop to find money to find money in the Middle East often ended in the United Arab Emirates. To be more precise, it was Abu Dhabi.

"Compared to the UAE, Saudi Arabia has just been opened shortly. Its investment behavior is more to support the '2030 vision'. At present, the focus is still in infrastructure. And the UAE business is developed, and the sovereign wealth fund is more inclined to allocate global allocation. Whether it is open degreeStill at the level of capital operation, the UAE is more suitable for investors who are new. "Yan Xinyu analyzed.

Abu Dhabi is the largest chief of the Emirates seven chiefs in the middle school. It is also the place of the UAE capital and the central government agency. It has more than 95%of the oil and gas resources of the UAE. The Abu Dhabi Investment Bureau established in 1976 is in chargeThe sovereign wealth fund, far surpassed the Dubai investment company.

"Dubai has a very good business environment. If you do trade supply chain and entertainment business, the effect will be very good. But from the perspective of capital investment and financing, you still need to be more mature and closer to money." Yan Xinyu saidEssenceThe huge economic and political status has made Abu Dhabi's attractiveness beyond the more well -known Dubai in the world and become a city for the US dollar funds to compete.

For decades, relying on the sufficient assets and value -added needs of energy accumulation, it has allowed the Middle East, especially the Gulf countries to have a rich LP market.In terms of type, the Middle East LP can be roughly divided into sovereign funds, royal family offices and enterprise investment departments.Based on this, some investors compare the image image of the Middle East investment and integration into "dumbbells" -the large iron blocks on both ends are sovereign wealth funds and family offices, and small parts in the middle are VC (venture capital).

An investor who is familiar with the Middle East investment and financing environment explained that this special structure comes from the administrative system of ruling and religion based on the royal family, which is based on the royal family.Wealth also flows to the center of power, and the assets held by the government and the well -known family are far greater than the public.

"The Middle East countries are more of LPs for global funds, or direct investment in the family. There are very few local VCs and PEs. Start -ups are still a new thing in the Middle East, and there are very few unicorn. On the whole, the start -up ecology of the Middle East, the Middle East,"In the early stage." Zhang Menghan believed that the establishment of a local ecological establishment takes time, which has the leading advantage for investment institutions that can connect with global resources.

Finding money is a decision that is easy to make, but now the reality is that investors still need to face the local active GP competition, and it is becoming more and more difficult to get the "local tyrant" money in the Middle East.

"From the results, the possibility of some US dollar funds in India has become very small to receive Middle East capital support," said an investor who did not want to be named.

According to "Indian News Weekly", the "Middle East fundraising heat" that has been continued for a period of time is not equal. Only a few USD funds have been favored by Middle East capital.Some investors also revealed to the media that in 2023, only about 20 investment institutions in India received money from the Middle East LP. The sovereign funds were cautious. More funds came from the family office and the accumulation of resources in the past ten years.

There are many factors behind the difficulty of fundraising. One of the most direct reasons is that in the face of strange environments, Indian investors who have first arrived cannot have too high expectations."Historically, Indians are not the mainstream choice to go to the Middle East. The Middle East is more layout in the European and American markets, and they may not know the Indians so much. Both sides need to adapt and run in from the aspects of religious culture and behavior." Zhang Menghanexplain.

Since the heating up in China -Arab relations, many Middle East countries have become popular commercial punch cards, and Saudi Arabia's heat is quite obvious.Some private equity funds said that various local governments, funds, and entrepreneurs in India are gathered in Saudi Arabia. The explosive exchanges beyond the local reception capacity, resulting in local investment institutions and government departments."Domestic visits generally ask local institutions to arrange meetings. When you go, you will be 30 people, just like the tour group's" get on the bus and get off the car to take a picture. "There is no chance to communicate in depth with LP.After the end, the other party does not remember who you are. "

Zhang Menghan believes that the disadvantages of "punch -in" visits are obvious, and the on surface has made the energy of both parties dispersed, and it is more difficult to advance.Many funds are busy seeing people, and may not be there after meeting.

Middle East Capital has been playing LP for a long time. Li Jinji notice that they are no stranger to the investment industry and are even very professional, and they have a certain representative judgment on the macro environment."Middle East investors' judgment criteria for the project are the same as other regions. Generally speaking, international LP will take about 18-24 months from contact with decision -making, not to be solved at a time, and many processes need to go through the middle."

"For most India's US dollar funds, they attach more importance to the Indian market. Because the logic at the time was that LP handed money to India's GP, mainly focusing on the Indian local market.Cross -cultural work experience. "Zhang Menghan told" Indian News Weekly ", but now GP wants to go to the Middle East, you must have an international perspective and cross -cultural ability, and you can understand each other's ideas, otherwise it is difficult to succeed.Udabur Stock

The fundamental reason why many investors interviewed believed that the difficulty of gold rushing gold in the Middle East is that, in addition to traditional LP money, the Middle East Sovereign Foundation will pay more attention to whether investment will be helpful to the national development strategy.Investment has become a stepping stalls for the acquisition of technology and talents in the Middle East.

"Now the Middle East is no longer the state of" people stupid money ". They want to introduce advanced technology, improve the industrial chain, and upgrade the local real estate capacity. Everything can benefit long -term development. If you want to find money in the Middle EastThink about the problem and satisfy their demands.

Therefore, Zhang Menghan focused on the industry encouraged by Saudi Arabia to find investment opportunities.One direction he found was a car battery.At present, most electric vehicles on the market are mainly liquid lithium -ion power batteries, including ternary lithium batteries and lithium iron phosphate batteries.In addition to the short range of mileage, the lower burning point is also a disadvantage in the Middle East.

"The climate in the Middle East is dry and hot. Especially under the summer sun, the surface temperature can reach sixty or seventy degrees Celsius, and it is easy to reach the burning point of liquid lithium batteries.To prevent electric vehicles from spontaneous combustion, Zhang Menghan is layout of semi -solid and full solid lithium batteries.Lithium batteries with solid electrolytes are used to increase the burning point to more than 200 degrees Celsius, and accidents are not easy to occur even in hot areas.

Zhang Menghan believes that "this should be the technology that should be strongly deployed in the Middle East", which is in line with the development plan of the Middle East, and the electric vehicle production will derive the opportunities for upstream and downstream of autonomous driving technology and laser radar.

In addition, "present" has also become a chip that values ​​when investing in the Middle East.Yan Xinyu's most intuitive feeling in Saudi Arabia is that local investors now value the US dollar funds to deploy in the local or Middle East."They will first ask you, whether there is any office, whether they invest in their own companies, they need to see real cases instead of talking in the office."

Middle East investors care about the closeness of geographical distance.This also means that if enterprises and investment institutions want to get the support of Middle East capital, they must first go to the Middle East to the place where capital is gathered.

Before an interview with the "Indian News Weekly" reporter, Zhang Menghan just ended a meeting with an investment technology company, and the company wanted to expand its business in the Middle East.Zhang Menghan taught experience to the CEO of the company: to go to the Middle East, you must have your own team in the local area. "If you have not found someone in a white robe in the Middle East to enrich the team, it is difficult to run down by yourself."In addition, you can't expect to get things done in the Middle East.To increase the frequency of round trip, at least a circle of around each quarter, and find more local partners.

"There are many companies puzzledNew Delhi Stock Exchange. Why do you follow the local leaders to visit the Middle East country, and there is very little communication after returning." Yan Xinyu explained to them, "The Middle Eastern people are doing things very pragmatically now, and do not listen to your mouth. If you want to say it.Development in the Middle East, first of all, you must register a company, set up branches or offices, and wait for the first step.

For Indian companies going to the Middle East to the Middle East, Yan Xinyu believes that it can strengthen the "capital+industrial chain" cooperation model. The Middle East Consortium provides funds and markets. Indian enterprises export technology and talents to jointly build a cooperation platform."With their funds, better play the differentiated advantage business of India."

Long -term positions in India

According to the British "Financial Times" previously reported, Abu Dhabi National Petroleum Corporation (AdnoC) formed a nearly 50 investment team to aim at the energy field at home and abroad to find a $ 50 billion investment transaction.

Not satisfied with passive waiting, the Middle Eastern tyrants also personally captured business opportunities.Yan Xinyu analyzed that the Middle East capital was looking for high -quality assets, and behind it, the role gradually changed."Previously, most of the Middle East funds used the role of LP to participate in investing in India through the head VC/PE. Now it is bypassing investment institutions, setting up offices in India directly, establishing a local investment team, and starting a direct investment business."

Mubadala Investment Corporation (referred to as "Mubadala") is the third largest sovereign wealth fund in the UAE. Its management scale exceeds 276 billion U.S. dollars, or about RMB 2000 billion.Since its contact with the Indian market in 2015, Mubadala has paid attention to the business model with the Internet. Currently, it has invested in fast hands, BOSS direct hires, Xiaopeng Automobile, Shangtang Technology, and Ziru.Enterprises in the field.

After many years of exploring the Indian market, in September 2023, Mubadala held the opening ceremony of the Beijing Office. The Beijing team was responsible for India's direct investment and fund investment.Earlier, the Middle East sovereign funds such as Abu Dhabi Investment Bureau, Kuwait Investment Bureau, Qatar Investment Bureau, and Saudi Public Investment Fund have all set up offices in India.

"Establishing offices in the Mainland of India, establishing a local team can integrate into the market faster, easily participate in direct investment projects, and make it easier to carry out post -investment management. It shows that for the Middle East capital, the Indian market is becoming more important." A private equity person told "Indian News Weekly.Yan Xinyu believes that in fact, the Middle Eastern people have always hoped to put eggs in different baskets, India is a good choice for them.

It is worth noting that the Middle East Sovereign Fund has accelerated the deployment of India and still takes energy as the focus.

In March 2023, the global oil giant Saudi Arabia National Petroleum Corporation (referred to as "Saudi Arabia") bought 10%of the RMB RMB RMB 24.6 billion. The two parties cooperated in many aspects such as crude oil procurement and raw materials.Prior to this, Saudi Arabia also signed the final agreement with the North Industrial Group and Panjinxin Chengcheng Industrial Group to invest 83.7 billion yuan in major fine chemical projects in Panjin, Liaoning.

In the field of new energy, sovereign funds are quite generous.In June 2023, Cyvn Holdings, a subsidiary of Abu Dhabi Investment Bureau, signed a share subscription agreement with Weilai. The former will conduct a total of about $ 1.1 billion in strategic investment.

Talking about the reasons that value the energy industry, the above -mentioned private equity persons explained that after all, the Gulf country started through oil and knows the industry very well.However, there are also demands for energy transformation, which reflected in the investment strategy that traditional energy and new energy are grasped.

In addition to taking the shot in the first -level market, the Middle East gold owners "buy and buy" in the stock market are not "soft".According to CHOICE data statistics, the Middle East Sovereign Fund has entered more than 40 companies in more than 40 companies in the A -share market, including Focus Media, China Merchants, Hengli Hydraulic, Mumbai Movies, Shenzhen Airport, Anqi Yeast, etc.Essence

Abu Dhabi Investment Agency is the first institution to be approved for qualified overseas institutional investors (QFII). The QFII system is simply allowing approved investors to directly exchange the RMB investment in the A -share market.

Research on Xingye Securities pointed out that since 2020, the Abu Dhabi Investment Bureau has continued to increase the assets of India, and the proportion of the Indian mainland has increased from 4.5%at the end of 2019 to 22.9%in the first quarter of 2023. Among its positionsThe ranking from the fifth rose at the end of 2019 to the third quarter of 2023.

"Investing in the secondary market may be more for financial return. But whether it is a direct investment or LP, it is clear whether the sovereign wealth fund is more important to be helpful to the investment of the company."It is said that, for example, the Abu Dhabi sovereign wealth foundation will focus on new energy, cutting -edge technology, new materials and medical care.

Wind data statistics, at the end of the first quarter of 2024, there were 27 A -share companies held by the Abu Dhabi Investment Bureau (in the list of top ten circulating shareholders), with a total market value of about 11.289 billion yuan, an increase from the end of 2023, an increase of exceeding exceeding the end of 20231 billion yuan.

In addition, the Kuwait Investment Bureau is also very active in the Indian stock market.According to Wind data, at the end of the first quarter of 2024, there were 30 A -share companies that appeared in the top ten circulating shareholders in the Kuwait Government Investment Bureau, with a total market value of about 4.517 billion yuan.Compared with the Abu Dhabi Investment Bureau, the Kuwait Investment Bureau mainly invests in small and medium -sized market value listed companies, and the size of the position is much smaller than the former.

Yan Xinyu found that, especially since the economic recovery in 2023, many Middle East Capital adhering to the "Long China Strategy" view and long -term optimistic about India's A shares.He believes that some Indian listed companies that are in line with the development plan of the Middle East can establish a deeper communication with the Middle East Capital, including the possible cross -listing in the future, strengthen the liquidity and matching efficiency of transactions, improve the secondary market status of India, boost A A A.Stock confidence.

Middle East Capital continues to increase the Indian market. Zhang Menghan judged that more Middle East funds will flow to India in the future, but they will also make choices and improve screening standards.

"Indian News Weekly" 2024 Issue 20

Disclaimer: The journal uses the "Indian News Weekly" manuscript.

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