Shanghai-based private equity firm PGC Capital is among a growing number of Chinese firms pursuing investment and property development in UK cities. As China’s economy slows, its investors are seeking to diversify their holdings, and the UK presents a stable and secure business environment with a good return on investment, according to Denise Li, PGC Capital’s CEO.
While most foreign investors are primarily drawn to capital city London, Ms Li has her eye on the UK's second most populous city, Birmingham. PGC Capital is planning what local newspapers have called “a massive spending spree” in the West Midlands city of more than 1 million people, filtering capital from Chinese and Taiwanese investors into a number of infrastructure, property and energy schemes. January 2016 saw the firm break ground on its first development in the city centre with the construction of 77 luxury apartments available for private purchase. Half were sold before the ceremony took place.
Second is best?
“Why Birmingham? Because there is a need,” says Ms Li. “At the end of last year, there was a severe housing shortage. And where there is need, there is investment opportunity.” Ms Li, who is also president of the GlobalChina Wealth Management Company, describes London as saturated, highlighting instead Birmingham’s potential for growth. “We believe these projects could change the relationship Birmingham has with the Chinese. Birmingham is a young and vibrant city, and we want to do some altruistic development to help the residents and create jobs,” she adds.
“There is money ready and waiting for us to do this,” Ms Li explains. Already, there are more than 200 dollar billionaires in China, and more than 3 million millionaires. PGC Capital works to channel funds from Chinese state-owned and listed companies as well as from many of these high-net-worth individuals into UK projects, offering high returns with low risk. While the first planned projects are in Birmingham’s property sector, schemes in energy and infrastructure, and extending to Manchester and other large UK cities, are on the group’s longer term agenda.
“There is a large appetite among wealthy Chinese and Taiwanese looking for foreign investment,” says Ms Li. “The UK is well established with a healthy legal system, but not many people know much about Birmingham. We are there to help identify the opportunities.”
"We’re not just helping high-net-worth individuals from Asia with investment; we are helping with intelligence as well,” she continues. “We are bringing institutions and retail investors from the other side of the world, helping them to enter profitable yet secure cities such as Birmingham, and soon we will be looking at opportunities in Manchester as well.
“We’d like to open doors. We are talking to potential partners from the UK, and we want to offer opportunities to high-net-worth individuals to invest in China. We are the people they can trust; our team has years of successful experience,” says Ms Li. Her team includes senior members from the Bank of China, the Bank of East Asia, HSBC, Citi Securities and more, all of whom have experience investing on behalf of the central government as well as the private sector. Ms Li herself has a long history of assisting companies internationally – clients she has helped expand into China include Formula 1, the English Premier League, Porsche, Nissan and Omnicom, to name a few.
“What I enjoy the most is when I see the level of trust of my customers,” says Ms Li. “It is up to us to provide all the legal knowledge, government support and professional work that we can, to let them know we are holding them by the hand. You are going in there not just to invest your money – you are building trust with the local professionals as well.”