CIC and Intel: State of the Art Venture

Ashby Monk

The (soon to be) world’s largest SWF has just teamed up with the world’s largest provider of chips that run personal computers. On Friday, Intel Capital, which is the investment arm of Intel, announced that it had signed an agreement with the CIC to launch a global search for co-investment opportunities in innovative technologies:

“The agreement, intended to pair the resources of CIC with the technology expertise of Intel Capital, will identify and support strategic investments in pioneering companies across a wide array of technology sectors including cleantech, software and services, mobility and digital home, among others…While the scope of investment opportunities will be global, there will be cross border opportunities that will benefit both the U.S. and China.”

According to Arvind Sodhani, who is President of Intel Capital and the executive vice president at Intel:

“This collaboration, combining the unique advantages of Intel Capital and CIC, will help drive the next generation of innovative technologies throughout the world.”

In my opinion, this is a very interesting partnership; CIC will bring the cash and Intel will bring the expertise. It’s a powerful combo. The details of the agreement are still a bit sketchy, but it looks like the two will search for private equity type investment opportunities outside of China. By the sounds of things, they will focus their search on companies looking for second round, mezzanine or bridge financing rather than seed or start-up capital. I would expect CIC to be in a “limited partner” type position in a new, dedicated Intel Capital PE fund…but I’m really just guessing at this point.

More generally, I think this is another indication that the CIC is maturing as an investor, recognizing the domains where it might not have the expertise to make sound investments and forging partnerships to overcome this deficiency. It’s a smart move. As a wise man once told me, the more you know, the more you know you don’t know…at the very least, CIC is starting to know what it doesn’t know, which means it knows a lot. I wouldn’t have said the same thing in 2007

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This website is a project of Professor Gordon L. Clark and Dr. Ashby Monk of the School of Geography and the Environment at the University of Oxford. Their research on sovereign wealth funds is funded by the Leverhulme Trust and The Rotman International Centre for Pension Management.

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