Amid reports that the creation of a so-called ‘outbound CFIUS’ investment screening mechanism is now aimed for late-August, Signum was fortunate to host former CFIUS case analyst Sarah Bauerle Danzman to discuss her insights regarding the Biden administration’s plans for the policy’s final design. Recording here, and key take-aways below:

• For the upfront avoidance of doubt: it is extremely unlikely that portfolio investments will be targeted at all.
• As regards active transactions (a la VC, PE), actual restrictions on outbound investments will likely target only the semiconductor sector.
• In two other sectors – quantum computing and artificial intelligence – disclosure requirements are likely, but without restrictions.
• Beyond these two sectors:
  • Biotechnology remains unlikely to be included, given potential impacts on global health concerns.
  • Electric vehicles (esp. battery technology) conversely seem primed for future inclusion.
• Within the parts of the semiconductor sector that will be in-scope, restrictions are likely to be ‘blanket,’ as opposed to ‘transaction-specific,’ which can be interpreted as negative (because more hawkish) or positive (because more clear) depending on one’s vantage point.
• The scope of those restrictions is likely to be calibrated in a similar way as the so-called ‘clawback’ restrictions included in the CHIPS and Science Act.
• That being said, it is likely that even after the coming executive order has been unveiled, there will be abundant time and opportunity for private sector players to help define such terms as ‘foreign entity of concern’. Those opportunities could prove critical to determining whether the final restrictions will, for example, include:
  • Entities located beyond ‘countries of concern’ (such as Europe vs. China).
  • Entities that might be considered ‘US persons’ by the Biden administration, but may not think of themselves as ‘American’.

Andrew D. Bishop
Senior Partner, Global Head of Policy Research

Head, Washington, D.C. Office | Signum Global

+1.202.440.1273

Signum Global Advisors is a policy and strategy firm with offices in New York, London, Washington, and Dubai


View this email in your browser.

This material is prepared by SIGNUM GLOBAL ADVISORS and is not intended to be relied upon as a forecast, research or investment advice, and is not a recommendation, offer or solicitation to buy or sell any securities or to adopt any investment strategy. The opinions expressed are as of the date on the front page, and may change as subsequent conditions vary. The information and opinions contained in this material are derived from proprietary and nonproprietary sources deemed by SIGNUM to be reliable, are not necessarily all inclusive and are not guaranteed as to accuracy. As such, no warranty of accuracy or reliability is given and no responsibility arising in any other way for errors and omissions (including responsibility to any person by reason of negligence) is accepted by SIGNUM, its officers, employees or agents.

This material may contain 'forward-looking’ information that is not purely historical in nature. Such information may include, among other things, projections and forecasts. There is no guarantee that any forecasts made will come to pass. Reliance upon information in this material is at the sole discretion of the reader. This material is intended for information purposes only and does not constitute investment advice or an offer or solicitation to purchase or sell in any asset classes or any investment strategy nor shall any securities be offered or sold to any person in any jurisdiction in which an offer, solicitation, purchase or sale would be unlawful under the securities laws of such jurisdiction. solicitation, purchase or sale would be unlawful under the securities laws of such jurisdiction.

https://go.signumglobal.com/emailPreference/epc/810483/f00bAUOVKlFk-8ZPqe2M-YgrHr0QmwfNMvsLPZ-IIOw/fdf227871dcebbcdeeed7bdec2f4ac143a60ae467b5abe3aeae43d014eac14aa/613196580