Above and beyond: Belt and Road Initiative investment and risk outlook

19 February 2019

Download Publication (2.93 MB)

Mergermarket is pleased to present Above and beyond: Belt and Road Initiative investment and risk outlook, published in association with CMS.
Monumental in its scope and financing requirements, China’s Belt and Road Initiative (BRI) is both impressive and a question mark looming over the international community. While some investors remain cautious given geopolitical concerns, few can deny the opportunities and untapped rewards that exist for those that get involved. 
In this inaugural report of BRI investment trends and challenges, based on interviews with 100 Chinese and international dealmakers, we explore the geographies and sectors where investors are likely to yield the best opportunities, as well as discuss best practices and strategies the top dealmakers are implementing in their own BRI investments. 
Key highlights include:
  • Sourcing deals: Identifying opportunities will become less difficult, although still somewhat challenging, especially for foreign investors, with one in three respondents saying it will be easier to find BRI deals. Likewise, 98% of respondents say foreign companies will increase their investments into BRI geographies.
  • Key geographies: Respondents identify Southeast Asia, Central Asia and Africa as “hot spot” regions where BRI investment will increase substantially in the near term. This is partly in response to the high infrastructure needs for these locations as well as opportunities that will open in “soft infrastructure” such as IT.
  • Risks and roadblocks: Political risk stands out for both Chinese (88%) and foreign (83%) respondents as a top risk. For both groups, legal advisors and risk consultants are included in their investment teams and strategic planning, and both also said more time and resources should have been dedicated to addressing political and legal issues before investing.