Mega-rich Chinese natives are looking to benefit from favorable price differentials in the United Kingdom, as a slide in the value of the British pound continues. However, they are looking to the UK for more than Chanel and Hermès bags, and Audemars Piguet and Patek Philippe watches with price tags that are lower than the ones at home thanks to the large-scale lack of globally uniform pricing. They are buying up bigger ticket items, such as British-born intellectual property as part of a larger acquisition trend.
According to Angus Knowles-Cutler, Deloitte’s vice-chair and the head of its China Services Group, a “key item” on the shopping lists of China’s billionaires are British companies. Many of China’s biggest deals to date have been focused on resource and energy sectors. However, Chinese private equity firms are widening their nets and scooping up everything from 16th-century pubs like the Plough at Cadsden – which Chinese investment firm SinoFortone acquired in 2016 in order to build 100 replica pubs across China – to famed football teams, such as the Wolverhampton Wanderers F.C., which is owned by Fosun International, the Chinese conglomerate that acquired Lanvin last year.
Yes, despite an emphasis on technical prowess, consumer-facing sectors have not been overlooked. In fact, the fashion industry has proven a hot target for Chinese investment over the past couple of decades, in particular – from Hong Kong-based investment holding company Trinity Ltd.’s 2012 acquisition of the nearly 250-year old Savile Row menswear brand Gieves & Hawkes to the minority stake that Hong Kong-based Yu Capital nabbed in buzzy brand Mary Katrantzou in October 2017.
So far this year, “Chinese companies have made 15 big acquisitions in the UK,” according to the Guardian, “spending $8.3 billion – already more than the $6 billion spent on 23 deals last year” when Britain surpassed the U.S. as the “largest recipient of Chinese outbound foreign direct investment,” according to a report from London-based law firm Baker McKenzie and research consultancy the Rhodium Group.
And Ed Ratcliffe, the head of Asia House, a consultancy that advises Chinese companies on UK investments, told the Guardian that there are more to come since “a lot of people in China want to get their money out, and the UK is seen as one of the best locations because of our strong legal system and protections.”
“Their money will be neutral once it’s in the UK, and safe if the Chinese government changes its policies,” he asserted. Additionally, Chinese giants are looking internationally in furtherance of a “desire to seek technological know-how and new markets, according to the Telegraph, as well as consumer-facing brands, which is precisely where both stories and fledging fashion brands will continue to come in.