The Chinese firm PiYi Investment Management has agreed to invest $100 million in Wisconsin companies across a range of industry sectors. The investment, announced Thursday by the Wisconsin Economic Development Corp., seeks to address the state’s lack of venture capital.
A WEDC selection committee will screen applicants from Wisconsin companies and select as many as 25 to make presentations to representatives of PiYi Investment Management when they visit Milwaukee and Madison in late September. The Beijing-based PiYi (pronounced Pea-Yee) is expected to make investments in the $2 million to $15 million range.
The application deadline is July 18. Interested companies in these industries can get the application at http://wedc.org/us-china-investor-week-2012.
PiYi manages private equity and venture capital funds for high-net-worth Chinese investors. According to the WEDC, PiYi has expressed interest in deploying an initial investment of $100 million in Wisconsin companies across a broad range of industries, including agriculture, with emphasis on food production and food transportation or food safety; energy production, storage, controls, and distribution; clean-technology or environmental remediation; infrastructure; information technology; biotechnology; and manufacturing or medical devices.
Presentations will be made to PiYi during “U.S.-China Investor Week” in September. WEDC said representatives of PiYi and their limited partners will review equity investments in the aforementioned range ($2 million to $15 million), and PiYi has expressed an interest in companies that are able to expand into the Chinese market.
U.S.-China Investor Week is a 10-day event with stops in Dallas, Madison and Milwaukee, Los Angeles, Portland, Florida, and Washington, D.C. The Wisconsin leg of the program, organized by PiYi and the Council of American States in China, will take place on Sept. 26 and 27.
Global reach
The state hopes Wisconsin businesses will use these connections to expand globally, while keeping high-paying, high-skilled manufacturing jobs in Wisconsin.
Paul Jadin, CEO and secretary of WEDC, recently signed a memorandum of understanding during a meeting with PiYi in Beijing to identify Wisconsin companies for potential investment.
“Over the next year, a number of Wisconsin companies will need to raise between $300 to $350 million,” Jadin said in a press release. “Because there is simply not enough capital available to fund our innovation, the WEDC is fostering these opportunities with investment groups about funding Wisconsin companies, either domestic or international.”
Between 2003 and mid-January 2012, WEDC said foreign-owned companies have announced plans to invest in 79 new projects in Wisconsin. They are projected to create $7.4 billion in new investment and create 11,000 new Wisconsin jobs.
The Walker administration has been frustrated in its attempts to create a state leveraged venture fund that would make investments in promising early-stage companies. In the most recent legislative session, a projected deficit scuttled a bill that had bipartisan support, but more recent estimates indicate a modest surplus heading into the next budget formation process, which will culminate in a new biennial budget by July of 2013.
The PiYi investment means that promising companies in need of capital won’t have to wait that long. “We have the ideas, we have the people,” said Gov. Scott Walker. “We just don’t have the capital to fund high-growth companies. This partnership with PiYi is intended to help Wisconsin companies get the growth capital they need, and possibly expand into the Chinese market.”
