Tech investor Baillie Gifford warns of 2023 reckoning for private companies
Baillie Gifford, one of the world’s top tech investors, has warned fast-growing private companies face a reckoning next summer.
And the £228bn Edinburgh-based asset manager says it is “not ready to give up on China”.
Peter Singlehurst, its head of private companies, told a conference on Wednesday that previous market cycles showed there was typically about 18 months between peak euphoria in the market and the peak frequency of down rounds.
The Schiehallion Fund holds three private Chinese companies: TikTok owner ByteDance and two drinks manufacturers, Jiangxiaobai and Genki Forest. All three represent “structural growth stories” where moves in macroeconomic growth “will help or hinder at the margin”, Singlehurst said.
He added: “The more pressing question for us in China is will the best Chinese businesses continue to raise capital from foreign investors?”
Historically the Chinese companies that have been the darlings of foreign investors — the likes of Alibaba, Meituan and ByteDance — have raised capital in US dollars, which meant foreign investors have been able to invest. “If the next generation of companies were to start raising capital in renminbi, that would make it much more difficult for foreign investors to be able to access the best companies,” Singlehurst said.
Baillie Gifford is “not ready to walk away from China at all”, he added. “We want to keep looking to see if we can continue to find great businesses because it will be those handfuls of exceptional companies that will matter for us and our clients, not China writ large.”
This story originally appeared on: Financial Times - Author:Harriet Agnew
