The investment bank plans to spend $100 million on digital assets as it struggles to boost its business in a weak Chinese economy
Key Takeaways:
- China Renaissance plans to invest $100 million in digital assets, more than two years after its former founder and chief rainmaker was detained for bribery
- The move comes as the company’s main investment banking business faces headwinds amid an economic slowdown in China, while cryptocurrencies are on a bull run
For companies looking to make a quick, large investment with big profit potential, the appeal of cryptocurrencies can be irresistible these days. That club gained a new member last week with the entry of China Renaissance Holdings Ltd. (1911.HK), the investment bank that became embroiled in controversy more than two years ago with the detention of its founder and chief rainmaker on suspicion of bribery.
Last Thursday, the company said its board approved a plan to invest $100 million of its internal resources in Web 3.0, or a decentralized internet built on blockchain and crypto assets. It also announced it was bringing in Fu Frank Kan, a tech veteran with crypto expertise, as an independent non-executive director. Fu is a co-founder of Math Global Foundation, which develops digital money wallets and software.
China Renaissance’s imminent dive into the wild world of cryptocurrencies comes as its main investment banking business struggles amid an economic slowdown that is dampening dealmaking in China. Last year, the company’s revenue, excluding investment gains, dropped about 23% to 777 million yuan ($108 million). The company could return to growth this year on the back of one of Hong Kong’s strongest IPO and fundraising markets in years, though it has yet to give out any guidance on its recent business.
While the Hong Kong investment banking market has been spotty in recent years, cryptocurrencies have been on a bull run for more than a year now, with bitcoins smashing records to sell for more than $100,000 apiece, up more than 70% in the past year. An asset class …