2020 Of PE / VC Companies: Fund Raising And Withdrawal Under The Policy City

On December 17, under the guidance of Zhuhai Municipal People's government and Nanfang finance and economics all media group, the 10th China Innovation Capital Annual Conference was held in Zhuhai, sponsored by 21st century economic report and 21 finance app.

In the round table dialogue session with the theme of "fund raising and withdrawal under the policy market", eight guests from nuocheng investment, maixing investment, Yuanxing capital, Rongyi investment, Junlian capital, Bohua capital, Huacheng venture capital and Honghui capital discussed the issues of equity investment fund raising, investment and withdrawal.

Cao long. Information map

Nuocheng investment Cao long:

There are many structural problems in private fund industry

China's private fund industry has developed to a scale of 15 trillion, and the private fund industry has begun to appear the trend of centralization, industry differentiation and survival of the fittest. From our observation, China's private equity fund industry has structural problems in many aspects.

1、 The lack of long-term funds is not enough to support the long-term and stable development of the current market scale.

In the mature market, as a long-term, high-risk investment category, the main source of funds comes from institutional investors, accounting for more than 50%. In China's current stock of 15 trillion private equity funds, the total amount of funds from social security funds, insurance funds, endowment funds and other long-term funds is about 500 billion, accounting for no more than 5%. The total amount of private funds supported by long-term funds is about 2-3 trillion, less than 20% of the total scale of the industry. Therefore, it can be said that the scale of China's private fund industry is not supported by long-term funds.

On the other hand, according to the latest data of China's shadow banking released by the China Banking and Insurance Regulatory Commission, the amount of capital recognized as shadow banking in the private equity fund industry is 4 trillion, accounting for 1 / 3 of the total scale of the industry. Due to the overflow of channel funds and inefficient funds, the private equity fund industry has led to the capital expansion of the overall market. With the implementation of follow-up regulatory policies, project risk exposure and capital duration matching, private equity funds that lack long-term institutional funding support may bear greater risks. More importantly, due to the high proportion of this kind of private funds, there is a possibility of systemic risk in the whole private fund industry.

2、 The level of direct financing is low, and the primary and secondary markets are upside down.

Equity investment is an important means of direct financing. According to the difference between the primary market and the secondary market, equity financing and stock financing can be seen.

In the whole year of 2019, the total financing scale of A-share market is 1.35 trillion, and the total investment amount of private funds in the same period is 1.29 trillion. From the perspective of the total financing scale of enterprises, the primary market has reached 95% of the total financing scale of the secondary market. The data for 2020 are not available at present, but there should be little difference from last year.

If the amount of capital obtained by enterprises from the primary market and the secondary market is equal, why do so many enterprises have to rush to enter the secondary market from the primary market. Obviously, this motive force does not come from the enterprise itself, but from the liquidity demand of its shareholders.

We believe that at present, China has an over developed primary market and an underdeveloped secondary market. The market is top heavy and the structure is unreasonable. From the perspective of long-term and healthy development, it is necessary to clear up the inappropriate funds in the primary market, build a secondary market with scale and quality, and gradually optimize the market capital structure.

3、 Managers were stratified and LP was involuted, and GP elimination rate was improved.

At present, the management scale of more than 20000 GP registered by the foundation association is seriously differentiated.

According to the data of the foundation Association, taking AUM 1 billion as the dividing line, the number of GP above this scale is about 9% of all the records, and this group manages nearly 80% of the funds in the market. Among them, 2.5% of the total number of GP with AUM of more than 5 billion accounts for 2.5% of the total number, and the management scale accounts for 45% of the whole market, which is close to half of the market.

However, the number of GP whose AUM is less than 100 million accounts for 67% of the total number, and the total management scale is only 3% of the whole. The management cost of this part of GP is difficult to support its market-oriented operation, and the probability of being eliminated is high under the market conditions.

On the other hand, from the perspective of long-term fund support, the scale of private fund industry supported by long-term capital is about 2-3 trillion. Moreover, at the present stage, the contribution of long-term capital has begun to enter the stage of repeated contribution to the invested managers, the proportion of new investment managers is declining sharply, and the managers of LP choose to start to roll in. For the GP that has not been funded by institutional investors, the opportunity for subsequent embarkation has been greatly reduced.

Golden flat. Information map

Rongyi invests in golden level:

"Industrial investment" focuses on industry, and its essence depends on the growth of enterprises

Rongyi investment is a newly established investment institution in 2015. In a word, it is an investment company with industrial background and starting an undertaking. Almost all of our colleagues in the whole team are from the industry, and 15 of them are from ZTE and Huawei. "Venture capital company" means that we will continue to grow like an industrial start-up company.

In terms of investment direction, we focus on hard technology and digital technology. In terms of hard technology, it includes communications, mobile phones, automotive upstream chips and devices. In terms of digital technology, it is mainly the application of big data, artificial intelligence and 5g. It was five years ago, and it's still the case now.

We are an investment company with industrial background, and we are a small organization in terms of volume. From February to now, we have made a total of 14 projects, of which 4 are more mature and 10 are VC stage. What is more gratifying is that the 14 projects invested this year, whether they are mature or early projects, have been growing very well, basically with 40% - 50% performance growth. Therefore, the industries we are concerned about are basically not affected by the epidemic.

From its establishment to now, we have invested more than 30 VC projects, and now we are gradually entering the harvest period. Because we are partial to industry, the success rate of investment based on industrial thinking is still very high, which makes us feel more confident.

In the so-called "industrial investment", industry is the attribute, investment is the subject, and the proportion of industry is more important. Investment is a financial tool for enterprises, and the most essential thing is the growth of enterprises.

Because we have been engaged in industry, we have a deeper understanding of how to develop technology, how to make products and commercialization, and how to do marketing. Therefore, it is better to take capital as a financial tool and make investment according to this thinking.

The cold winter of capital or related winter did not affect our development. In our understanding, doing investment is the same as starting a business. As long as you choose the right direction and keep focusing, as long as you are professional, you can do very well. In the cold winter of capital, you can also achieve good fund-raising.

We are a 100% team holding company without a deep background. We can only rely on industrial experience and industrial resources to help the invested enterprises, so as to achieve better performance and achieve good fund-raising results continuously. The key to fund-raising is not how large the scale is, but whether it can achieve higher investment efficiency in the given scale.

Information map

Yuanxing capital Yu Lifeng:

2020 is a harvest year with both difficulties and opportunities

Source star capital was first separated from the US dollar fund. We focused on big health and "smart +" areas, including intelligent manufacturing and civil military integration.

2020 is a harvest year with both difficulties and opportunities. It is a turning year for China's venture capital industry to choose its investment strategy in the future.

In the first half of this year, due to the impact of the epidemic situation and the objective situation of China's economic development, venture capital industry encountered difficulties in terms of withdrawal and target selection. The implementation of the registration system and the comprehensive registration system in the future will open a channel for many high-tech start-ups to refinance in the capital market.

From the perspective of future strategy, 2020 is a turning year for venture capital industry. In the past 30 years, the most popular venture capital industry in China is Internet investment. A large number of Unicorns appear in this field, while the so-called traditional industries such as manufacturing and environmental protection have received little attention. Today, let's look at it again. Many investment institutions have shifted their focus to big health and intelligent manufacturing.

It is generally believed that this year is a good harvest period, mainly due to the policy guidance and the improvement of the multi-level capital market. Many institutions want to invest the money they didn't invest in the first half of the year, so the valuation of the invested enterprises is soaring, which will cause a relatively large investment bubble.

We believe that investment at this time should return to its essence and pull the reins when necessary. From the perspective of fund managers, research driven fund strategy is more reasonable, which can return to the enterprise value itself. What VC should do is to discover and create value. Now project listing and fund withdrawal are not problems. The key is capital efficiency and capital appreciation when listing.

For the advice to the enterprise, my consistent view is to run quickly. If the enterprise can be listed, on the basis of reasonable listing laws and regulations, the financing channels can be opened through listing as soon as possible. If you don't have the conditions, you should seize the financing window period and make more reserves.

From the perspective of fund-raising, the trend of long-term capital entering into China's RMB VC funds will enter a turning point this year and next year, and the difficulty of fund-raising will slightly improve. China's long-term capital contribution to the RMB fund is too low. We believe that this situation will gradually improve.

Information map

Mai Xing Investment Cui Wenli:

Choosing the best enterprise is the truth of investment

This year is a very special year. We feel that the market competition is very fierce, but there are many opportunities. Maixing has been focusing on the consumption and medical fields, which are the hot spots of investment this year. We have been working in these two fields for more than ten years, and we see many and very good opportunities in the selection of investment targets.

Mcstar continues to have some successful investments in the consumer and healthcare sectors. The topic of new retail has been talked about for several years, and in the past two years, we have seen the blossom and fruit. Excellent brands are emerging in many subdivided fields. For example, we invest in Xiaopi, which has become one of the category representatives of maternal and infant complementary food. Moreover, Jane Eyre is being recognized by more and more consumers who advocate healthy life. The market is always in the process of change, or high tide or low ebb. It is the truth of constant investment to choose to invest in the best enterprises.

Wang Junfeng. Information map

Wang Junfeng, Junlian capital:

The era of IPO arbitrage is no longer, the institutions with pursuit are in the early stage of layout

This year's situation is characterized by a double day of ice and fire. In the first quarter, we were a little flustered by the impact of the epidemic, and felt that we could not see the future clearly. 3、 In April, the investment institutions reached a general consensus and resolutely invested in big health and hard technology track, and the whole market began to become very active.

By the end of the year, from our point of view, the market has been overheated, the valuation is very high, and many projects are even unable to invest.

I particularly agree with president Yu (reporter's note: Yu Lifeng) that this year is a bumper year with both risks and opportunities. Now the situation is a bit like 2014, after the innovation and entrepreneurship was put forward, the whole market was detonated. In the current market, there are not only the dividends of financial market reform, including the opening of the scientific and technological innovation board and the liberalization of registration system, but also the impact of the new epidemic situation in 2020. The combination of the two changes something.

Looking back on 2013 and 2014, if the investment institutions did not keep pace with the times, they may have disappeared in the mainstream market today. Also standing today, if we can't invest bravely in medical and health care, hard science and technology, and invest in real enterprises with original technology, we will soon be eliminated by the market.

On the one hand, if we still want to invest in companies with income and profits, we can invest in very few targets. On the other hand, the space of listing arbitrage is narrowing rapidly, and the A-share market will become more and more Hong Kong shares. Therefore, investment institutions with pursuit will firmly move forward and actively explore investment opportunities in the early and very early stages.

Generally speaking, the market environment of equity investment has changed from the original pursuit of projects, discovery projects to today's creative projects. Only by keeping up with this rhythm, can the investment institutions survive in the fierce competition in the future, and continue to create one amazing return after another.

From the IPO listing situation, this year's performance of each company is good. We have achieved 11 IPOs this year, and there are 5-6 projects to be issued later. Compared with the number of IPOs, we pay more attention to corporate quality and cash recovery.

In the future, it will be easier for enterprises to go public. Investment institutions should consider how to invest in large-scale enterprises and hold a considerable proportion of shares in large-scale listed companies. In this way, it is possible to obtain a large amount of return in the exit.

In terms of investment, when the valuation is particularly high, we would rather not encounter such cases than accumulate the so-called exit cases in the form of pre IPO. In other words, investment institutions should be able to invest in more imaginative projects and be willing to invest early.

To invest in the early stage and co create projects with excellent entrepreneurs, the core is that the team has a deep understanding of the industry, and then make a move after having a full understanding of the industry development law. We also have our own requirements for the selection of such targets: simple, different and scarce. The team should have enough seats and bring its own flow. Otherwise, the financing in the future will be very challenging.

At present, different institutions have different attitudes towards such projects. In the future, more and more cases may appear, and we hope to play a more active role in them.

Information map

Bo Hua capital Xu Wenbo:

PE / VC should be alert to follow suit investment when technology change brings new investment opportunities

Bohua capital is a relatively new organization. We focus on hard technology, including artificial intelligence, 5g, semiconductor, etc. If we ask about our experience this year, we can say that surprise and surprise coexist.

We are an investment institution with the concept of research driven and value investment, and we have to compete for projects in this year's market. From a long-term point of view, the return space of overvalued projects will be relatively narrow, so we are hesitating and competing.

This experience is still quite deep, so we call on all members of the investment community to be rational and invest with long-term doctrine and value investment philosophy. Our industry is a long-term industry, which is also result oriented in the end. If we make follow-up investment with short-term capital, we may have to face a bad situation in the future.

On the other hand, the industry is also bringing us surprises. Although many industries were at a low ebb due to the impact of the epidemic in the first half of the year, domestic demand increased in the second half of the year because they could not go abroad. We are in an economic society, which is an era of rapid technological change, so there are still many systematic opportunities.

For next year's market environment, we have three expectations. First, the fund-raising environment will be improved. On the one hand, some changes in the capital structure will take place. On the other hand, the IPO upstarts are becoming LP. Including the rise of second-hand shares, also brought some changes in the fundraising side.

Second, the investment perspective. We don't think there will be much change in the first half of next year. The expectation of exit is still very high. There will be a bubble in science and technology investment. The new trend is that the investment stage will extend to the early stage. The capital market is also a market, which pays attention to the balance of supply and demand. In the past, it happened that the early institutions invested in the middle and later period, but in the future, the investment institutions will move towards the early stage.

Third, from the perspective of exit, the pressure of exit will be greater next year. Many companies can be listed, but investment institutions may not be able to make money. The institutional process of capital market will also lead to polarization of valuation. The market value of good enterprises will be very high, while the bad enterprises will not bring considerable returns to investors.

From the industry we are concerned about, one opportunity is that 5g is really widely used in mobile phones, bringing about the subversive transformation of the whole ecology. We will wait and see. Another is in artificial intelligence. We think that the application rhythm of artificial intelligence in different fields is different. We will pay attention to some of them which are closer to industrialization.

Information map

Huacheng venture capital Tong Hongmei:

After the tuyere, it will return to rationality, and the primary market will be more stable in 2020

Huacheng venture capital is supported by the United Front Work Department of Guangzhou municipal Party committee and the Municipal Federation of industry and commerce. It is jointly sponsored by Jiadu, Jinfa, Xiangxue and other leading scientific and technological enterprises in Guangzhou. Many of the leading enterprises in Guangzhou have a deep accumulation and a long history. Huacheng venture capital has gathered the excellent resources of the previous generation of entrepreneurs, hoping that the investment can drive the technological innovation of Guangzhou. Under this concept, Huacheng venture capital was born.

We are a private venture capital company that adheres to market-oriented operation and focuses on the related industries of three leading listed companies of science and technology. We will invest at both ends, one is pre IPO project, we don't want to miss the dividend of registration system; on the other hand, we will focus on early investment along the industrial layout, and industrial empowerment can make early investment grow faster.

2020 is an extraordinary year. It is doomed to remember this year's extraordinary in the next 5 years, 10 years or even longer, so there are many changes to talk about this year.

The first is the intensity of reform at the policy level. The strength and speed of policy reform in the capital market should be unprecedented. Second, this year is a bumper year for the primary market. Despite the obvious decline in fund-raising in the primary market under the epidemic situation, in terms of investment, we all caught up with each other in the second half of the year, especially the head office. The third feeling is structural differentiation. One is the obvious differentiation of investment institutions in the primary market, and the second is the differentiation of projects, especially for the head projects.

The most typical characteristic of Guangdong's private enterprises is pragmatism, and we also adhere to the "pragmatic" to determine the investment strategy. The pragmatic investment style of combining the two sides is our investment strategy. This investment strategy will be adjusted with the changes in the capital market and the growth of our venture capital in Huacheng. For example, next year, we will adjust the number and proportion of IPO, and put more into early innovative projects. In this way, these projects have the opportunity to bring good return on investment.

Market forecasting is hard to do, but there are rules to follow. For example, when it comes to tuyeres, semiconductors and biomedicine will be strong this year. Will they continue next year? It's been crazy this year. Can you be more crazy? We are cautious in this regard. When will the tuyere pass? I don't think it's too far. After the tuyere is the return to rationality, which is the law.

Second, the delisting system will force the primary market to be more rational if there are so many red lines. The primary market investment is the growth of the enterprise, not speculation to earn the difference, which is the essence of PE / VC investment.

Under these two laws, we believe that the primary market will be more stable in 2020. Affected by inertia in the first half of the year, the trend may continue this year. But the future will certainly tend to be calm, investment will be more rational and pragmatic.

Jiang yanye. Information map

Jiang yanye, Honghui capital:

Medical projects focus on growth, and funds extend pan health investment

Honghui capital is an investment company established in 2014 focusing on the big health industry. At present, it manages three RMB funds and three US dollar funds, with a total management scale of more than 10 billion RMB. We still have some predestination with Zhuhai. Before, our annual meeting of investors and entrepreneurs was held in Zhuhai, and our invested enterprises have made great progress in Zhuhai.

In this special year, April and may are a watershed in investment. Due to the impact of the epidemic, business travel has basically stagnated. It is difficult to contact new projects by using various teleconferences for communication and research. Therefore, the main task is to finish the follow-up projects before the epidemic.

The first half of the year is a good opportunity for the internal fund, we have more time and energy to do in-depth industry research. For example, we also have a Book Sharing meeting inside, where everyone will share their reading experience. From May and June, it basically returned to normal, which was carried out in unexpected forms.

In the medical industry that we focus on, because of the impact of the epidemic, there is a large influx of funds, and the overall valuation is rapidly pushed up. In the field of medical treatment, we mainly choose projects with specific growth at this stage. Even if the P / E ratio of listing in the future is not so high, the growth of enterprises is certain.

On the other hand, our fund strategy has been adjusted and extended this year, starting to set foot in the pan health industry track to balance the overvalued value of medical investment. For example, we have invested in dental chain clinics in the past, and this year we have extended our investment in an enterprise producing electric toothbrushes; we have invested in pediatric clinics in the education park before, and now we will focus on special formula milk powder and probiotics. Valuations in these areas are not as high as those in the medical sector, and there will be more choices.

After casting, it was also a double day of ice and fire. Mindray medical, which we invested in, is engaged in imaging equipment. During the epidemic period, it also produced a large number of imaging equipment for huoshenshan hospital. This year, the company's performance has increased significantly. Of course, many enterprises have been greatly affected by the epidemic. We will spend a lot of time holding temporary board meetings to discuss how to deal with the cash problem under different circumstances, whether it is a bridge loan or ask the bank to borrow a batch of funds urgently. On the whole, the investment work started in June has returned to normal, and the workload after investment has also returned to the level of last year.

In terms of fund-raising, we started the third phase of US dollar raising in the fourth quarter of last year. Affected by the epidemic situation, we can not travel. All our fund-raising activities can only be carried out in China. Despite some challenges, we still appreciate the support of the new investors and the investors of the second phase of US dollars. In the end, we closed the account with us $435 million for the third phase of US dollar, which also achieved relatively good results.

For the follow-up development of the market, one is the rational return of valuation. I have been engaged in medical investment for 12 years, and I have experienced the most exaggerated year of valuation this year. It is inevitable that the valuation will return. Second, resources are concentrated to the head, which is not only applicable to the invested enterprises, but also to the fund industry.