Foreign Investment in Alternative Assets in Colorado

| Blog

Written by Dan Lane, Global Business Manager

At the Colorado Office of Economic Development & International Trade (OEDIT), our goal is to ensure that there are plenty of good jobs for the people of Colorado. One way we accomplish this is by recruiting high performing companies to our state. Domestically, Americans have known for years that Colorado is a hotspot for investment. With the top ranked state economy in the US, an extremely talented workforce, a fast growing population fueled by an influx of millennials, and an overall business friendly environment, it’s easy to see why Colorado is so attractive to US companies. Internationally, word is getting out as well. We tend to see a lot of foreign companies setting up operations in Colorado when there are nonstop flights between our capital city of Denver and a given company’s home country. However, with regard to countries to which Colorado does not have a nonstop flight, we have been seeing some very interesting investments in alternative assets in Colorado. While OEDIT is focused on bringing primary employers to our state, seeing this type of alternative investment coming to Colorado is very exciting as it signals increased awareness of Colorado among investors abroad, and likely represents the tip of the iceberg of future foreign investment here. In this post, I want to highlight some recent examples of alternative investments made in Colorado by foreign investors.

Startups

There have been several notable investments by foreign investors in Colorado startups recently. A few high profile examples include the following:

  • LogRhythm – This fast growing security & intelligence company based in the tech hub of Boulder closed on a $50 million round of funding in August of 2016. According to LogRhythm, this financing round “includes new investors EDBI, the dedicated investment arm of the Singapore Economic Development Board, headquartered in Singapore.”
  • SomaLogic – Another Boulder-based company, SomaLogic is a healthcare and diagnostics company that recently closed on a rather large round of funding in January of 2017, this time from China. As SomaLogic details on its website, “In recognition of (SomaLogic’s) potential, the Chinese ‘Digital Life’ company iCarbonX invested $161 million dollars into SomaLogic to push protein-based health insight generation further and faster.”
  • ParkiFi – ParkiFi is a Denver-based startup that spun out of Colorado’s local Boomtown accelerator program. They received funding from Taiwanese venture capital firm Mesh Ventures. As Mesh explains, “ParkiFi is making parking less of a hassle with their real-time parking occupancy platform. Utilizing their sensor technology, they provide real-time data to parking lot operators, cities, and mobile applications to let them know where open and available parking spots are. Drivers can find spots quicker and parking operators can optimize revenue by understanding their current inventory.”
  • Hidrate – Yet another Boulder startup, Hidrate makes the Hidrate Spark 2.0, a smart water bottle that tracks your fluid intake and syncs the data with your phone. They received investment from Singapore-based SoGal Ventures, which focuses on pre-Seed to Series A funding.

Access to capital continues to be a challenge in Colorado. In a state where we have so many exciting startups and an ecosystem that encourages them, we love to see new sources of funding from abroad help them thrive. Obviously, the capital that is invested in these companies helps these startups hire new employees, which is directly in line with the goals of the Colorado Office of Economic Development & International Trade. The companies mentioned above are just a small sampling of our local startups that happen to have received funding from international investors, but we hope that this list will continue to grow as foreign VCs take notice of the investment opportunities available in Colorado.

M&A

Recently, there have been some interesting acquisitions of Colorado companies by foreign investors. Of course, deals continue to happen all the time and OEDIT may not be aware of all of them, but below are a couple of recent transactions that are of note:

  • Yes! CommunitiesAccording to the Denver Business Journal, this Denver based company “owns and manages 178 manufactured-home communities in 17 states.” In August of 2016, it was reported that “GIC, formerly known as Government of Singapore Investment Corporation, is buying 71 percent” of Yes! Investments. The Wall Street Journal estimated the total value of Yes! Communities at $2 billion, meaning that this transaction was valued at about $1.4 billion.
  • GHX – GHX is a provider of connected, intelligent healthcare supply chains based in Louisville, Colorado. According to GHX’s own press release from May of 2017, GHX “entered into a definitive agreement with Temasek, an investment company headquartered in Singapore, for a significant equity investment in the company.” The Wall Street Journal reported that “the deal is valued at about $1.8 billion.”

Real Estate

Real estate is an asset class that is familiar to, and popular with, investors from all over the world. OEDIT does not get involved with real estate deals, except when commercial real estate is part of a company’s site selection process. That said, we recognize that real estate investment is often the first exposure that foreign business people may have to Colorado. According to the Denver Post, “offshore investors pumped more than $980.5 million into the Denver market in 2015.” Here is a very brief list of some of the more notable recent real estate transactions in Colorado that involved foreign investors:

  • Japanese investor Masayuki Tsukada, the president of Tokyo-based Tsukada Global Holdings, acquired the Eagle’s Nest Apartment complex in Leadville, Colorado. The investment was worth $13.5 million. Leadville is a high elevation city in the mountains of Colorado and is famous for its outdoor recreation events.
  • In December of 2015, an unnamed Korean investor purchased the CoBank Center, an 11-story office tower in Greenwood Village, just south of Denver. The building sold for $113.46 million.
  • The Panorama Corporate Center, which houses both Comcast and United Launch Alliance, was sold to a group which included a Chilean investor in 2016. This office park is just down the road from the CoBank Center which was purchased by the Korean investor.
  • The Solaris Residences, a luxury residential property located in the heart of one of Colorado’s premier ski resorts, was an EB-5 project funded by foreign investors. EB-5 activity in Colorado has not been as widespread as in some other states, but the Solaris project is one of the most visible examples of foreign investment in Colorado made through the EB-5 program.
  • Private real estate investment also continues to draw interest from individual investors around the world. The Denver Post reported a few years ago that investment from China, in particular, has been heating up.

While this post is not meant to be a comprehensive accounting of the countless deals that occur in Colorado on an annual basis, my hope is that it will raise awareness of Colorado as an investment destination for foreign capital. Our local venture capital and private equity firms, which I didn’t mention in this article, may already be raising capital from abroad, which in turn could be invested in job-creating Colorado companies. The types of alternative asset investments I have described here may very well be the leading edge of a broader trend of corporate investment in Colorado from countries all over the world.

Colorado Office of Economic Development and International Trade Logo Colorado Office of Economic Development and International Trade (303) 892-3840 oedit.info@state.co.us
Colorado Office of Economic Development and International Trade Logo Colorado Office of Economic Development and International Trade (303) 892-3840 oedit.info@state.co.us
Colorado Office of Economic Development and International Trade Logo Colorado Office of Economic Development and International Trade (303) 892-3840 oedit.info@state.co.us
Colorado Office of Economic Development and International Trade Logo Colorado Office of Economic Development and International Trade (303) 892-3840 oedit.info@state.co.us