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Deep Dive with Charlie Welsh, Co-Founder of Mergermarket

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Charlie Welsh, Co-Founder of Mergermarket

Charlie Welsh, Co-Founder of Mergermarket

This interview will appear in the 1Q Y2014 (April 2014) issue of the Sovereign Wealth Quarterly.

This is a deep dive with Charlie Welsh, Co-Founder of Mergermarket

1. As co-founder of the Mergermarket Group, what is one lesson that should be learned about the current M&A environment in Asia?

In recent years China’s foreign investment strategy has been largely focused on gaining control of strategic raw materials that the country needs, such as energy, metals and food, this trend has become dominant. Chinese companies are now increasingly looking to move up the production value curve and be less dependent on commoditized, labor-intensive manufacturing processes. In many cases the only way to do so is to attain access to production technologies and expertise that are possessed by companies based in more advanced economies. While this can sometimes be attained by licensing the technology or forming a partnership with a technology transfer arrangement, Chinese companies are looking to formal joint ventures and, increasingly, to the acquisition of western companies that can help them develop such technological expertise.

2. During a news conference on March 6, 2014 at the National People’s Congress, China Finance Minster Lou Jiwei commented that, “Whether GDP growth is to the left or to the right of 7.5 percent, that is not very important. What is important is job creation.” Do you have any thoughts on this?

China views economic growth less from a statistically or financially-defined perspective, but more in terms of its ability to preserve social stability. The country has emerged from a very poor, undeveloped country to the world’s leading industrial production base in just 35 years. During this time vast numbers of its predominantly rural-based population have been migrating to the countries many cities where they have experienced increased standards of living, higher levels of education and greater personal freedoms. However the freedoms have been carefully limited and the country remains controlled by one central political organization. It could be argued that this political control has been accepted because the system has focused on ensuring the provision of jobs for the country’s vast population.

China has been attempting to form bilateral currency swap agreements with some trading partners in order to avoid having to rely on the dollar or other reserve currencies.

3. How will China respond to a major GDP contraction?[ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]

Anne Sheehan to Retire, CalSTRS 1st Corp Gov Director

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Anne Sheehan, the first Corporate Governance Director at California State Teachers’ Retirement System (CalSTRS) and the current one, plans to retire March 30, 2018. Sheehan’s team manages an activist portfolio worth around US$ 4.1 billion, seeking to influence and help turnaround its large portfolio holdings in select public companies. Sheehan was hired back in 2008.

Christopher J. Ailman, CalSTRS’ chief investment officer, said in a organization release, “Anne has been my most unconventional, best hire.”

A replacement search is underway.

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Temasek Rides with Google on Go-Jek

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Singapore’s Temasek Holdings has reportedly joined forces with Google LLC and Chinese on-demand service provider Meituan-Dianping as part of a US$ 1.2 billion fundraising effort for Indonesian ride-hailing startup Go-Jek that has put regional rivals like Uber and Singapore-based Grab on notice.

Screen Shot Go-Jek, January 19, 2018

Although exact figures for individual stakes have so far been kept secret, the new infusion of capital puts Go-Jek, incorporated as PT Aplikasi Karya Anak Bangsa, at a valuation of roughly US$ 4 billion. Samsung Venture Investment Corporation also participated in funding, as well as existing private equity investors KKR & Co. LP and Warburg Pincus LLC.

Google’s direct involvement in Go-Jek’s growth – rather than through its Google Ventures unit – highlights its faith in the latent potential of ride-sharing services – and the tech-enabled consumer services sector as a whole – in Southeast Asia. Home to more than 640 million potential customers, the region was identified as the fastest growing emerging market for e-commerce globally in an industry report published jointly by Google and Temasek last December. According to data compiled by the internet-giant and the Singaporean sovereign wealth fund, ride-sharing in Southeast Asia is expected to grow into a US$ 20.1 billion industry by 2025, compared to US$ 5.1 billion in 2017.

2011 Origin Story

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Temasek Leads Series B Round for Chinese Robo Startup Rokid

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Rokid Corporation Limited, a Chinese robotics startup that specializes in smart devices assisted by artificial intelligence (AI), announced the closing of a Series B extension round through its WeChat account on January 18, 2018. The capital-raising effort was led by Singapore’s Temasek Holdings, with additional contributions from Credit Suisse Group, China Development Bank’s overseas investment arm CDIB Capital International, and existing investor IDG Capital. Although Rokid did not disclose the size or terms of the deal in its announcement, the technology company reportedly secured US$ 100 million in funding.

Founded in 2014 by chief executive Mingming Zhu and chief financial officer Eric Wong, Rokid’s core products consist of its smart speakers, the Rokid Pebble and Alien, as well as the newly debuted Rokid Glass augmented reality spectacles. The company’s most exciting offering, however, is its Full Stack Open Platform, a collaborative effort made in partnership with Alibaba that gives third-party developers backdoor access Rokid’s software suite and hardware integration and will – it hopes – help give its offerings the accessibility and recognition they need to thrive outside its home market of China.

Rokid is particularly keen on bringing its products to the U.S., where it believes it can challenge Google and Amazon’s dominance in the smart home arena. Amazon makes the Amazon Echo, while Google has Google Home.

The Series B

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