The rich Chinese investors are quietly channeling tens of millions of dollars in private companies controlled by Elon Musk using an arrangement that protects their identity from the public’s view, according to asset managers and investors involved in transactions.
From Musk was appointed a key figure in the will of the American president Donald Trump to redo the US government, asset managers based in China promoted the relationship of the pair as a occupation to raise the capital of the rich Chinese. Money takes place in Musk’s non -public companies, notably XAI, Neuralink and SpaceX, the most precious private company in the world.
Investments are placed thanks to opaque structures called special use vehicles, which have the advantage of hiding the identities of investors, in order to avoid anger by the American authorities and companies distrusting Chinese capital during a Nadir in relations between the two countries.
Asset managers behind transactions have told investors that entities are specifically designed to avoid disclosure.
The use of vehicles for special use in financing is commonplace and there is nothing illegal in the arrangements. However, this raises concerns about the potential for undue influence and conflicts of interest at a time when Musk has an unprecedented involvement in American politics, politics and affairs.
“How can someone in Musk’s position have so many links with China, but always be a good person to reform the American government?” said Derek Scissors, a principal researcher at the American Enterprise Institute. The Chinese influx of money in the Musk commercial empire “adds to this image that it is more interested in its reputation and its mark in China than in American interests”.
The opaque nature of structures makes it difficult to assess the full scale of Chinese capital that flows in private companies in Musk. But three Chinese -supported asset managers have told Financial Times that over the past two years, they have sold Chinese investors more than $ 30 million in actions in SpaceX, XAI and Neuralink, three private technology companies controlled by MUSC whose evaluations have increased.
All in all, SpaceX has collected more than $ 10 billion in investors from around the world since its creation in 2002, according to Pitchbook.
THE Chinese capital entrance In Musk, the business empire is mainly focused on profit and has little to do with technology transfer or influence on public policies, depending on the people involved in transactions.
With a slow, rich interior economy Chinese investigate investment opportunities are looking abroad.
But the structure means that Chinese investors receive limited information, if necessary, on the finance and performance of the company, unlike the details shared with the main investors.
Although Musk has a warm relationship with Beijing, it was difficult for the company to make direct investments in China, said financial advisers. Beijing security hawks criticized SpaceX for its links with the American army.
“It is not easy for Chinese entities to invest in a leading American high technology company like SpaceX,” said Kevin Chen, chief economist at Horizon Financial, a financial consulting group based in New York. “Chinese money is not welcome in many sectors.”
The representatives of Musk, Spacex, Xai and Neuralink did not respond to the requests for repeated comments.
A recent Wednesday afternoon, hundreds of Chinese investors have passed on a webinar to hear a representative of Homaer Financial, an asset manager in eastern China, offer an opportunity to invest in SpaceX for as little as $ 200,000 per person.
The manager of Homaer said that she expected a spacex assessment almost tripler at 1.1 TN in three years, thanks in part to the “full” support of the United States government and the military who continued to place supply orders to the space of space technology even “in time of distress”.
The rich Chinese people began to finance private musk companies in the late 2010s, when the founder of Tesla began to build a Shanghai electric vehicle factory in 2019 to take advantage of the country’s effective and low cost supply chains.
The first investments borne fruit. Homaer declared in an article on social networks in October that a group of its customers had made a return of 530% by investing in SpaceX in June 2018, hosting six years later.
An investor in Homaer confirmed the figure, adding that he regretted not having invested more. “I knew Musk was a good businessman,” he said. “But I did not expect him to succeed in such a short time.”
In the past two years, Homaer has launched three funds to invest in SpaceX and has been able to achieve its capital lifting targets in a few weeks, said a person who knew the issue.
When Beijing has imposed restrictions on private companies – including cancellation IPo of the group Ant Jack Ma And require that the Didi Global carpooling group has canceled Musk companies in the United States – continued to grow.
“I have confidence in musk more than in most Chinese start-up entrepreneurs, who find it difficult to face an increasingly dominated economy,” said an investor who bought SpaceX actions via Homaer last year.
Some Chinese have paid a price to openly buy challenges in Musk’s Ventures. Leo Group, a Chinese company, made the headlines in 2021 when it announced its intention to invest $ 50 million in SpaceX via Tomale Bay Capital, a investment capital based in California. Less than a week later, the American partner of Leo revoked the transaction, citing SpaceX’s discomfort with the public disclosure of the Chinese stake, according to a subsequent legal battle between the two companies.
In response, the Chinese have turned to special vehicles. Asset managers pool investors’ funds in an entity registered on the Cayman Islands, which invests money in funds based in the United States managed by Western Investment Capital Companies, who are already investors existing in Musk’s Ventures.
The presence of Chinese funds is not visible in the public archives of assets.
A person close to Homaer said that the company had asked its American partners if they accepted Chinese money. As a general rule, the terms also require that the American partner liquid for investment in extreme scenarios such as a military conflict between the two countries.
“The risks exist because we do not know how bad American-Chinese relations will get bad in the coming years,” said the person.
Uncertainty has not prevented the rich Chinese from concluding the agreements. Although the strict capital controls of Beijing have limited investors in Musk China to those who have foreign bank accounts, some wealth managers have found options to overcome the barrier.
“China is faced with an excess capital offer and a shortage of high -quality projects,” said a New York investment manager seeking to raise capital of China for such investments. “This is where we integrate.”
