After 1 years of development, the venture capital industry in China is undergoing changes with the launch of the Growth Enterprise Market. In the past, venture capital institutions that were active in China were faced with the development environment of "two heads are outside", that is, overseas fund raising, through investing in overseas holding companies of China companies, and realizing the exit of overseas listing. However, with the introduction of restrictive policies and the rising cost of listing, it is more and more difficult to go public overseas, and the high P/E ratio of the domestic capital market has become an exit choice for more and more venture capitalists.
Xiong Xiaoge, global executive vice president of p>IDG, thinks that the current P/E ratio of Internet companies like Tencent in Hong Kong is only about 78 times, but if they switch to the mainland A-share market, the P/E ratio will be more than twice as high as it is now, because the users and investors of these companies are all in China, and many users will definitely try to invest in companies like Tencent.
After the establishment of GEM, Chen Youzhong believes that venture capital institutions are expected to raise funds in China and withdraw from China. "With the expansion of RMB investment and local listing, the four main activities of China venture capital industry cycle: financing, investment, post-investment management and exit, will eventually be completed in China." Chen Youzhong said that because venture capital has shifted from high technology to investing in local high-growth companies, local exit is one of the routes that venture capital must choose.
according to the report of zero2ipo, in 27, overseas funds in US dollars accounted for more than 8% of the venture capital market in China, while RMB investment only accounted for less than 2%.
In p>28, seven projects of Zhiji Venture Capital Plan * * * were listed, and one of them will be listed in China. At present, Zhiji RMB Fund is already negotiating two projects.
Tian Lixin, managing partner of Deutsche China, recently said in the "28 China Venture Capital New Army and Project Financing Summit Forum" that there are two possible modes for foreign VC to set up RMB funds under the current environment: first, overseas funds transit to Chinese mainland, and after obtaining the approval of SAFE, a joint venture company is established to set up RMB funds. There have been cases such as a joint venture between Taiwan-funded Zhongyu Venture and Wuxi Municipal Government, and a cooperation between Safran Asia Fund Management Company and Tianjin Municipal Government. The other is that overseas LPs set up offices in China, and after obtaining the approval of the Ministry of Commerce, they directly raise and manage the funds of overseas investors in China and set up RMB funds, such as IDGVC. Of course, in the end, this second model may be extended to overseas funds to directly raise and manage the funds of domestic RMB investors in China, but the possibility is still very small.
Chen Youzhong, president of Zhiji Venture Capital, said that Zhiji's RMB fund was also set up with a small amount of shares from local governments or partners on the basis of overseas funds, but the fund has not been approved by the Ministry of Commerce.
"At present, the US dollar investment brought by foreign venture capital still accounts for the vast majority, but since 28, RMB fund investment will definitely grow, and it will have the opportunity to surpass US dollar investment and become the mainstream of venture capital in China in the next four or five years." . According to the latest report of Zero2IPO Group, a research and consultancy institution of venture capital and private equity in China, in Chinese mainland, the total amount of capital invested by foreign currency funds in China is expected to stop falling and rebound in 21, and correspondingly, the proportion of fundraising and investment by RMB funds may be lowered.
The report believes that the global private equity market entered a downturn last year due to the impact of the current financial crisis, especially the depreciation of assets of overseas institutional investors. It has to re-examine the potential risks in this investment field and adjust the asset allocation ratio in private equity investment. Even for the fast-growing emerging markets such as China, it has reduced, postponed or even stopped investing in private equity funds in this region.
The report pointed out that it should only be a short-term behavior for institutional investors to reduce the asset allocation ratio in alternative investments, especially under the special attraction of the ultra-high return on investment in China market. In 21, the total amount of capital injected by overseas institutional investors into China's private equity market will rebound.
However, the dominant position of RMB funds has not been consolidated, and the scale of RMB funds and foreign currency funds will fluctuate with the development of the industry in the next three to five years, which does not rule out the possibility that foreign currency funds will surpass RMB funds again.
The report shows that in China's private equity market, Last year, 15 RMB funds successfully raised US$ 12.295 billion, and the number of new funds raised and the amount raised accounted for 84.7% and 65.4% of the total amount raised in the same period of 29, respectively. For the first time, RMB funds dominated the market in the total amount of newly raised funds. At the same time, foreign funds raised US$ 6.52 billion.
From the average amount raised by newly raised funds, The average fundraising amount of RMB funds is one-third of that of foreign currency funds. Moreover, from the investment point of view, the total investment amount of foreign currency funds last year was 8.428 billion US dollars, accounting for 74.2%, which still occupies a dominant position in the market. Because the fundraising and investment scale of RMB funds are generally small, the investment stages and investment strategies that funds can involve are bound to be limited to some extent.
At this stage, The sources of funds of RMB funds in China are mainly government finance (government-guided funds), national social security funds and private capital (private enterprises/wealthy individuals), with a single source of funds and the structure to be optimized. < P > In addition, RMB funds are obviously limited by the characteristics of their sources of funds. For example, government funds often have a strong administrative color, which reduces the efficiency of fund investment decision-making to some extent; Another example is that private capital generally changes greatly due to the small scale of funds, and its persistence is not enough; Paying too much attention to short-term income is not conducive to the long-term and stable development of RMB funds.
The report also points out that at present, large institutional investors with huge capital stock and investment ability, such as local pensions, enterprise annuities, commercial banks, insurance companies and trust companies in China, have not been able to participate in the domestic RMB fund raising work due to the constraints of the current national policies. From the experience of the United States, the active participation of large institutional investors has played a vital role in the vigorous development of the whole industry.