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Discussion in 'General Investing Discussion' started by grossrealisation, 16th Jan, 2007.

  1. grossrealisation

    grossrealisation Active Member

    8th Sep, 2006
    hi all.
    just a little post with regards china
    as a few here will know that my next project is using unlisted property trusts and equity lending off these trusts into china.
    well the first one will be going ahead which will be a releave to me as I have put alot of work into it.
    there is no pds as its fully subscribed with private investment and it will be the first run on the board.
    my little group has got one power of attorny for a very large chinese construction company and the australian representative for another.
    this post is more for information and if people want to know about the china market then by all means ask.
    we are doing double investing that chinese investing here and european/australasians investing there.
    end product is not going to be marketed at this stage but the group is very divers this may change.
    china is a very interesting market and if you get invest smart the newsletter or any of the ipo newsletters
    you will see that there are alot of new funds opening up
    mac has a few and so has challenger .
    ours are direct investing but using equity which makes it a bit different and we have set up an equity market that trades direct equity from private investors and not just in australia.
    the first is an equity lend against a term deposit our prefered option.
    a very interesting year ahead.
    any question post here I will try to answer.
  2. seaview

    seaview Well-Known Member

    8th Jun, 2006

    Would love to hear how this venture is faring with the latest downturn in China. And what risks and minimisation strategies are in play now and in future. How is your crystal ball re China market, and China funds too?

  3. grossrealisation

    grossrealisation Active Member

    8th Sep, 2006
    hi seaview.
    the down turn does not have an effect on my project
    as I am equity investing in construction and the projects are in areas that the normal bigger players are not in at the moment.
    the correction for me is not that big a problem
    all markets will adjust
    I am looking at two overseas markets and investing in a small way in both.
    one is for cash flow and the other is via equity.
    my crystal ball tells me that china has at least 5 years before the chinese will look at lifting the draw bridge on investing there.
    I could be way off the mark with this one
    as no one else is seeing it the same as me
    so it is real crystal balling.
    I am not into shares as its not my market but the chinese share market looks like a heart attack waiting to happen
    its up 165% and then down 10% thats a good market for some one who knows what they are doing( and I don't)so I don't get into that market
    but there are lots and lots of companies that are well above the cash flows to list
    and ipo of these small companies is a very good market( small in china's numbers and the bhp of australia in our company sizes) these companies do need western people or companies to list
    this area is huge.
    thats one area
    and the other is the foreign investment area which is the market that I am moving into.
    under china rules you must have a 20% foreign investor in your project thats construction, purchase, what ever.
    what we are doing is being that 20% investor but equity lending on term deposits the safest system I know.
    and as I tell most people if you direct invest in china,
    "they will steal your money" there is no two ways about it but I am yet to find someone that can steal equity and if its in an australian account thats even harder.
    these are open ended unlisted trusts with direct equity investing, I have not seen this anywhere in the world;.
    I have seen listed equity trusts doing the same but this is our little version.
    there are lots of high cash flow, under priced assets in china and there are alot still to be built and thats what my project is aimed at.
    with regards to listed asia trusts I would be very carefull with what I invested in.
    with china it is a two way street and you need to make sure that the fund you are investing with has got the required other half of the equation
    and not a venture capital, hope to get a project fund as these are the ones that lose most of there cash and then come back with a very low return.
    the returns in china can be as high as 35% in some asia funds but those are a 50/50 jv fund with the goverment and these are the best to look for,
    only trouble is that they are very hard to find and most are closed or you need to be on the list for the next one.
    hope this helps.
    si ya