As tens of millions of people climb its economic ladder, India has developed into the latest example of an impoverished nation whose newly wealthy now possess the financial firepower to buy American factories, technology companies and real estate. And among the destinations for those investments is a gaping construction site that will become the first hotel among the art galleries, restaurants and loft-style offices in Milwaukee's Third Ward. The nine-story luxury hotel with a rooftop lounge will cost in the tens of millions of dollars, more than half paid for by investors from India.
Other India-bankrolled projects in Wisconsin are on the way, predicts Bob Kraft, a Milwaukee entrepreneur who for years has used U.S. immigration law to channel Chinese funding into the metro region in return for providing U.S. residency visas to qualified foreign investors. Kraft brokered the Third Ward hotel investment as his firm's first significant inflow of capital from India, the world's second-most populous nation behind only China.
India, like China, has become a strategic focus for the firm, FirstPathway Partners LLC. To meet with prospective financiers, Kraft's partner, Dan Wycklendt, leaves Wednesday on his eighth extended trip to India in two years. When it comes to investment funding from the developing world, "China is No. 1," said Kraft, echoing data on capital flows. "But India is growing rapidly."
The hotel will be managed by San Francisco-based Kimpton Hotels & Restaurants, known nationwide for its chain of high-end boutique hotels. It also serves as a tiny symbol of a much larger role-reversing phenomenon of the global age: Emerging economies such as Brazil, Mexico, China and India are creating a new source of investment funding for the rest of the world. "It has been less than a decade since India's companies have jumped into the global mergers and acquisitions arena," according to the BBVA international banking group.
China's role as global financier already is familiar to many. It is the biggest foreign lender to the American economy, buying the U.S. Treasury securities that Washington issues on a daily basis. There are numerous instances of major Chinese investments in the United States, from China's Anbang Insurance Group, which just paid $2 billion for the landmark Waldorf Astoria Hotel in Manhattan, to the private Chinese investors who helped finance Milwaukee's $22 million Global Water Center, a technology and research incubator. But India is tracking China's ascendancy, creating wealth that is staggering and recent.