Hong Kong's venture capitalists have learned the lessons of the past few years and are now well positioned to deliver the value expected by shareholders. Jamie Paton, director, North Asia, 3i Asia Pacific, admits that there are lessons to be learned from deals struck during the dotcom boom. 'At the end of the day, you have to come back to the fundamentals of the business and the management team,' he said. 'All of us are looking to back quality people, running businesses that have the ability to grow and create value. There were some dotcom deals done where that criteria didn't exist.' It is the quality of the management that has become an important fundamental for any venture capitalist looking to inject cash into a mainland Chinese enterprise. Investors have begun to realise this and Chinese companies are beginning to catch on. 'Chinese chief executives understand that there is a physical limitation in terms of their understanding of the culture, language and training discipline of their western counterparts,' said Vincent Chan, director and executive vice-president of Jafco Investment (Hong Kong). 'So we see more and more appointments of non-PRC nationals as chief executives of foreign-listed, [mainland-backed] companies.' Mr Paton echoed these sentiments, saying investors from the United States and Europe were looking for management teams with an international outlook. 'It all comes back to the people running the companies,' he said. 'If you have good quality management trained in the US or Europe, they have worked for a larger corporation so issues such as corporate governance are something they are familiar with, then we feel we can associate with them.' Hong Kong can provide the technical backup and service solutions to companies seeking exposure on the global market.
