Investing in small businesses an option for sovereign funds, family offices: Charles Li
Micro Connect pooled more than 11,000 stores and 688 brands in China in 2023, sharing US$113.2 million of revenue with investors
Charles Li Xiaojia, the mastermind of Hong Kong’s US$24 trillion Stock Connect investment link with mainland China, said he has a great investment idea for family offices and sovereign wealth funds: the world’s mom-and-pop businesses.
The former CEO of bourse operator Hong Kong Exchanges and Clearing (HKEX) is planning to engage state-run funds and family offices to invest in small businesses via Micro Connect Macau Financial Assets Exchange (MCEX), a platform offering alternative funding to small businesses in China.
Li and co-founder Gary Zhang launched MCEX for institutional investors in 2023 to trade daily revenue obligations or DROs, which give investors a slice of revenue in exchange for growth capital. The platform has since expanded beyond China to connect small businesses from Southeast Asia, the Middle East and North America.
“The next stage of development is to expand the investor base, which is why Micro Connect will conduct a lot of roadshows this year,” Li said on the sideline of a seminar on market outlook organised by the Bank of East Asia. “Many businesses are small, but they have stable income and good growth potential.”
MCEX is eyeing big sovereign wealth funds seeking new asset classes by allocating a small percentage of their portfolio capital in small businesses, and family offices which can make quick decisions on such investments, Li added.
