PE firm Canyon Bridge shifting focus to Europe

Canyon Bridge Capital Partners LLC, a Chinese-backed private equity fund known for being blocked by the Trump administration from buying a US chipmaker, has shifted its attention to Europe and is set to complete a new investment in a major European technology company in the coming months.

The fund, with a focus on the semiconductor industry, is actively pursuing investment opportunities in Europe, where conditions are seen to be more open and welcome toward private equity capital, said Raymond Bingham, co-founder and partner of the California-based investment firm.

The targeted European company is a supplier in the semiconductor sector and it also provides software to other industries, according to Bingham, who would not disclose further details about the deal.

If realized, the transaction will be Canyon Bridge's second major portfolio investment after its £550 million ($765 million) takeover of British chip designer Imagination Technologies last November.

The fund with large Chinese State-owned enterprises as its main investors gained sudden attention last September after its $1.3 billion deal to buy US chipmaker Lattice Semiconductor was barred by the Committee on Foreign Investment in US, a reviewing panel staffed by senior officials from Washington, D.C., over national security concerns.

"Regrettably, we don't see any signs that the Trump administration's concerns for investment capital from China will be... welcome," Bingham said.

The collapsed Lattice deal underlined the rising hurdles for Chinese investors in the US amid intensified regulatory scrutiny on foreign takeovers of American business.

The situation in the US has driven Chinese investors to Europe, which is seen as a more favorable market, with companies that possess valuable technology but are in need of capital and exposure to Asian markets.

"It's understandable that any government would pay attention to what we're doing because of the source of the money. But the reaction in Europe has been very different than the reaction in Washington," Bingham said.

"We're bringing in equity capital, which has not been very abundant in Europe, especially for technology companies. That's creating some very interesting opportunities," he added.

Bingham said Canyon Bridge managed to raise $1.5 billion from Chinese investors for its first fund. The firm has developed a pipeline of new investments and it plans to raise a second fund soon.

China, the world's largest consumer of semiconductors, has stepped up the effort to bolster its own chip industry through various means, including the acquisition of foreign technology companies.

"China becomes more self sufficient in chipmaking and it will make it difficult for western suppliers. That's the nature of business and competition. We think it's a good thing because it forces innovation on both sides of the ocean," Bingham said.