Hong Kong’s State Path Capital beats path Down Under

A Hong Kong-based investment firm has set Australia as its top target over the next year.

Alan Kwan, executive director of State Path Capital. Picture: David Geraghty

A Hong Kong-based investment firm, connected to the city’s richest person, Li Ka-shing, has set Australia as its top target over the next year with technology and healthcare assets in its sights.

Alan Kwan, executive director of State Path Capital, said the investment company wanted to dispel some untruths about Asian funds investing in Australia.

“Chinese funds are looking for a solid return and Australia is a safe investment environment. But I think some Australian companies are probably not taking advantage of Chinese funds because they are worried about IP, but that certainly should not be a concern,” Mr Kwan said.

“Chinese funds are looking at Australia as a safe sovereign place to invest. They take a passive involvement from what we have seen and we want to encourage Australian entrepreneurs to see Asia as an untapped resource in terms of capital.”

Mr Kwan said entrepreneurs did not have to “lose a lot” in the early stages of trying to develop an asset.

“It’s not always about equity and giving up equity, there’s also hybrid things you can structure,” he said.

“Australians are lacking in those different kinds of investment plays that they could strike into deals. What’s interesting in Asia is there are different types of capital raising structures.”

State Path Capital is chaired by Mr Li’s nephew Alastair Lam and its chief financial officer is Mabel Chu, the former managing director of Mr Li’s Horizon Ventures, which invested in Facebook, Skype and Spotify.

Mr Kwan said apart from Mr Lam’s family connections, the company had its own network of funds it worked with.

“We feel comfortable going into all sorts of industries because we have experts. If it makes sense we invest,” Mr Kwan said.

The Australian-born investor said he and Mr Lam were interested in Australian innovation and would focus the next year on trying to move Australian technology into commercialisation.

“Australia is a great place for us, as Australia is great at innovating but poor at capital raising,” Mr Kwan said.

“That’s where we want to bridge that gap — there is a lot of capital in the Asian markets and I think a lot of Australian companies don’t know how to access that.”

He said he had, surprisingly, not been inundated with calls from Australians chasing his investment dollars.

“I don’t know why. I don’t know where Australians are going ... a lot of innovation is heading overseas and they end up not becoming an Australian product,” he said.

State Path, which recently entered the Australian market through an investment in Bionic Vision Technologies, is looking at local technology and healthcare assets.

Mr Kwan said the shopping list included medical centres, particularly bulk-billing centres with 10 or more doctors.

“Healthcare has delivered great returns, which is why we are keen on healthcare,” he said.

Mr Kwan added that the company did not have a set figure it was looking to pour into Australia, saying it could range from small to significant investments.

He said he was looking at a takeover of an asset that was part of a spin-off, which could be worth hundreds of millions of dollars. The company has also looked at a social search platform that he said was a small company but had “huge” growth potential.