In the business world, knowledge is power.
For international investors doing business in Asia, getting information is a critical and difficult part of the job. A number of corporations, including top investment banks and private equity funds, have faced these challenges with the help of Blue Umbrella.
Allan Matheson, founder of the Hong Kong-based regional company, says it “provides public-source due diligence reports on companies and individuals across Asia, enabling our clients to understand everything they should know about their counter-parties.”
The 34-year-old started Blue Umbrella last year, quickly making it a leader in the specialized field. Mr. Matheson’s team of 10 experienced due-diligence experts scours data bases, government records, the Internet and other sources to find “all the information that is publicly available about our subjects.”
The job is more than just Googling. “There is actually a lot of information in Asia if you know where to look and have language capabilities,” he says.
Blue Umbrella’s experts are charged not only with finding data but also efficiently processing and analyzing it, so that they can succinctly communicate what is most relevant to a client. With the current interest in China, 70 per cent of its searches are related to mainland companies.
“Sometimes information if it’s just data is not useful,” Mr. Matheson explains, “but once you start cross-referencing and checking it against other information, that is where we find things of interest.”
Through public-record sources, Blue Umbrella’s experts have found evidence of IP infringements, fraud and shaky financials. After a search, they don’t get involved in possible next steps, which are typically carried out by private investigators and former law-enforcement personnel.
A Canadian company looking into a possible joint venture or bringing on a new supplier might have need for Blue Umbrella’s services. In China, for example, many factories and companies like to falsely claim that they have government backing, claiming it gives them a commercial advantage. Facts can be embellished and documents forged. “Trust is very important in China and you don’t want to be openly checking out things, but [sometimes]you cannot just take things at face value,” Mr. Matheson says.
Blue Umbrella, which remains privately held and does not publicly disclose its revenue, got its name when Mr. Matheson’s brother was sitting in a Paris café on a rainy day. Mr. Matheson grew up in Vancouver and still has family there, though he’s been residing in Asia since 1998 when as a UBC student he studied for a year in Beijing at the prestigious Tsinghua University, also known as the MIT of China.
Mr. Matheson graduated in 1998 with a degree in international relations, and moved to Hong Kong in 2000 to become a membership manager for the Canadian Chamber of Commerce. He then served as executive director and stayed with the organization for three years. He left to join what would later became the second-largest pre-employment screening firm in Asia. He left that business, which had grown to 300 employees and offices in eight cities, to start Blue Umbrella.
“The most difficult challenge of operating a due-diligence business in Asia is the diversity of the jurisdictions we must be familiar with. Gathering information on a company in China carries different challenges than gathering information on a company in India. In Canada, however, access to information is much more straightforward.”
Special to The Globe and Mail