Amid China’s tighter scrutiny and regulatory crackdown of various sectors, there has been a sharpened focus on ESG — a form of sustainable investing that takes into account environmental, social, and governance aspects — according to panelists at DealStreetAsia’s Asia PE-VC Summit 2021.
Beijing has introduced a spate of crackdowns on various sectors — edtech and crypto trading to gaming — wiping out billions of market capitalisation from some of the top companies in the country.
“[Given] the large platforms’ excessive power and ability to stymie smaller players, the clean-up gives a level playing field for smaller competitors. And our venture capital GPs are not too bent out of shape,” said Jie Gong, Hong Kong-based partner of UK investment firm Pantheon.
Gong was speaking at a panel discussion titled “Evolving LP-GP dynamics, private markets opportunities & Asian co-investments.” at the summit on Sept. 28.
Echoing the sentiments, Myron Zhu, a co-panelist with Gong and head of Asia private markets at Manulife Investment Management, said investors were not astounded by the Chinese government’s scrutiny. “China has always been a policy-driven market. What has caused the capital markets a surprise is just the pace [at which] these calls are made in one go.”
From an institutional investor’s perspective, Zhu said, as he aims to back managers in Asia, his firm wants to provide support in areas of ESG, risk management, as well as regulatory compliance oversight. Among ESG investing themes, he said: “Energy transition, with the latest technologies, is going to be profound.”
Watch the full video of the chat here: