Proterra Asia managing partner Tai Lin said he is highly attracted to making investments in China and the country’s food sector is less exposed to political and regulatory risk than many developed markets.
Responding to a question at The Australian’s Global Food Forum in Brisbane, Lin said he was positive about opportunities in China, in contrast to the views of many international investors in recent years.
“I really like China as an investment destination today,” Lin said.
“Political risk is often talked about but I do not think that exists for companies operating in China in the food sector – and by the way, I think countries like the UK, or Germany, or maybe Australia, have a much higher political risk [with] constantly changing leadership and governments changing direction.
“In China, it’s different but very consistent and very predictable, especially for the food sector.”
Lin said that the pullback of institutional capital from China was another opportunity.
“All the institutional investors have decided to ‘risk down’, get out of China. Historically, for private equity fund managers with slightly longer-term horizons, those have been the very best times to make investments [because] we’re not forced to try and sell in a quarter, or a year or two years,” he said.
“Yes, consumer growth [in China] is down, but the food sector is very recession-proof. So, I think the consequence of reducing capital and lower valuations, versus a growing population with a very, very stable food sector – and a long-term horizon for a PE fund manager – makes for a very interesting constellation.
“So, I want to go there and we want to deploy more money there right now.”
Lin was also positive about Australia, having visited the country more often in the past year after Fidante, a subsidiary of ASX-listed Challenger Group, became a shareholder in Proterra Asia in 2023.
He said the firm is aiming to announce its first Australian investment in the coming weeks.
“We’re hoping to close a transaction where we’re going to buy the majority of a healthy snacks brand, out of Melbourne. They sell everywhere – WHSmith in airports, Woolworths – and we want to introduce them into all our commercial channels, and the relationships we have in 10 other countries in the region. Maybe we can help them a little bit with increasing sales and their reputation.”
