Bain Capital Zhu: Investors must understand the rules of the game

Shan successfully operated the China Construction Bank's overseas listing during Morgan Stanley's work and participated in dozens of important IPO projects, Zhu accumulated a great deal of Chinese local experience. After he joined Bain Capital, Zhu always kept a clear head in the roaring process of China's asset securitization.　　Recently, Bain Capital managing director Zhu in Shanghai received the "First financial daily (Weibo)" interview. First Financial daily: In recent years, the PE industry is dozens of times times the book returns, attracting the various sovereign background of institutions, banks and other financial institutions have entered, and even a few so-called corruption, a number of related local investors through a variety of contacts to get projects or investment opportunities.　　Is this a challenge for Bain Capital, the background of foreign capital? Zhu: This industry is very competitive, Bain is not "foreign monk", the past is the era of networking projects has passed. Moreover, each person has the way, China is so big market, capital is many, stock capital is few, even in short supply, quite a lot of Chinese enterprise cannot get equity investment, can not get equity.　　For example, Zhejiang so many enterprises shortage of funds to borrow usury, if there is a chance to get equity investment, certainly more than the cost of borrowing usury much lower, the most important thing is to make capital and need investment opportunities for enterprises can butt.　　Daily: China's market economy has its own particularity, the allocation of resources in the state-owned enterprises more easily to tilt, and private equity investment most projects are private enterprises, how do you see this situation? Zhu: Investors want to understand China's system and status quo, although objectively there may be some unsatisfactory, but I think the Chinese government's support for enterprises is very large, because the world can see GDP growth as a measure of the government is not much.　　So investors must understand the rules of the game in order to determine what kind of enterprises can be in this environment well developed.　　Daily newspaper: Do you agree with the view that falling asset prices are a positive opportunity for private equity investors to buy when the economy slows down? Zhu: I don't think so. Buying is cheap is on the one hand, but it should be realized that cheap is because the expectation of growth is bad, unless today's expectation is proved wrong.　　The purchase price reflects the investor's expectation and judgment on the future development of the enterprise, if the investor thinks that the enterprise can grow 40%, then the 20 times multiples is also a good deal, the key is anticipation.　　In the last round of the global financial crisis, many acquisitions were based on low growth expectations, but later proved that investors were wrong, the recovery and growth rates were still fast, so the assets bought at low expectations were cost-effective.　　Daily: China's slowdown in economic growth is already a fact, how do you see the future of China's economic trend? Zhu: I'm not very worried about the Chinese economy in the near future, but there are some concerns in the medium and long term. The growth model of the past 30 years has been difficult to continue, and economic development must find new models, but at present there is no suitable new model to emerge, and there is no clear way toNow transition to that pattern.　　In other words, China's economic structural problems are relatively large, huge foreign exchange reserves is not a good thing, domestic lack of consumer demand, insufficient domestic demand is still a problem.　　Daily: The global economic turmoil, the Chinese enterprises have brought a "go out" opportunities, set off a trend to buy overseas assets, what do you have ideas and suggestions? Zhu: What worries me most is that when Chinese companies buy assets overseas, they are blindly feeling cheap and making decisions without understanding. This requires a lot of professional and international knowledge to compare the price of the local enterprises around, the study of the potential acquisition of cash flow multiples, price relative profitability, etc., the market is not cheap for no reason.