China-Australia capital Liu on investment growth is the only standard

China and Australia capital 2009 years before birth, Liu himself also less than 40, but he understands policy, understand the market, has rich experience in the operation of listed companies "capital veteran." Liu often self-deprecating "talk pe with friends, often ridiculed ' up early, catch a late set '".

Liu, majoring in economics, after graduating from the Shenzhen Science and Technology Bureau of the results Trading center engaged in the transformation of scientific and technological achievements in the forefront of the work of the SAR, during the 2000-year Shenzhen GEM preparation work. 2002 transferred to Shenzhen High-tech property exchange, led a number of small and medium-sized High-tech enterprises and private equity reform, accumulated a wealth of actual combat experience. 2009, he led the team to create the capital of China and Australia.

There are now 5 funds in China and Australia, including 3 growth funds, a new material early professional fund, a technology achievement incubation fund, the total fund size of 1.2 billion. Founded only three years, the first phase of the Fund has achieved 3 successful exit, by the well-known TV series "painted Skin" investment test water, but also obtained a good return.

The Gem

Liu believes that his investment career has three milestones, this experience and ten years of grinding a sword of the gem closely related.

2000, Liu participated in as "China Nasdaq" GEM preparatory work, responsible for doing business listing cultivation, so and create a bond. Although more than 10 years have passed, he said, the fiery passion of the year was still vivid.

In the Science and Technology Bureau carefully selected 23 High-tech enterprises in Shenzhen as the first batch of gem alternative enterprises, regular enterprise Training Board Reserve Enterprises ... Gem launched the premature death, there has been let Liu and the same year as the painstaking efforts of the colleague's disappointment, there are branch hing Biology, Allwin Xun, Xun Bao Network, by the days of science and technology, sang Xia Gao Ke, such as the fall of the star Enterprise in Shenzhen, but also with the continents of electronics, science and technology, Han's laser, Gold Card, Dashi Intelligence and other enterprises listed growth. In this regard, Liu familiar with the first batch of 23 business fate of continuous concern, but also let him learn from the passion to calm, fully aware of the risk of investment and the law of enterprise growth, which later on the PE management are sublimated into a rare experience.

02, Liu was selected to be transferred to Shenzhen Hi-tech property rights Trading company engaged in corporate equity investment and financing related work, the 04 SME board launch, the 05 split share reform started, he began to conceive and launch the establishment of private equity investment funds, has tried the company system, trust system models, 2007, partnership Enterprise The changes let Liu feel that the spring of private equity funds is finally coming, he designed and participated in the Shenzhen Hi-tech property exchange and jointly launched the first domestic limited partnership pe--"South China Sea Growth Fund" the whole process of management.

He modestly called Zheng Weihe as a mentor, said "in the process and Zheng always learn a lot of things", but also play football ball friends. In fact, as early as 05 ago, Liu presided over a number of investment projects, including angel investment nano-ceramic material project, Peking University neodymium Iron and nitrogen new materials project 75 million yuan investment, such investment practice for the future of the establishment of China and Australia laid a good foundation.

During the investment and financing work of Shenzhen Hi-tech property right transaction, Liu witnessed the experience of investing in a miracle now. At that time to cultivate the SME reserve listed enterprises, such as the Yuan Yuan, and and Thailand, Avic Sanxin, Batian ecology, and so on investment prices, such as high-tech, and so on are generally net assets floating a little bit, there is no price-earnings concept, a little courageous investors picked up the "big cheap", such as Paradise Silicon Valley in the high division of a single net make 2 billion Once laid their own in the creation of the world's lake status, as well as in China Airlines three Xin on the pots filled with the pan-Asia, such as Shanghai, at that time, the exchange, the achievement of too many such capital predators. This may be one of the reasons that prompted Liu to come out and specialize in the fund.

09 years later, Liu really out of the state system. Shenzhen Hi-tech Property Exchange fund reform, in order to introduce advanced management system and talents, China Venture capital company and Oakland Bank PE investment in the Asia-Pacific region as a strategic investors enter, China and Australia Capital officially established.

Although the official establishment of China-Australia capital is only 3 years, but in the heart of Liu has been 6-7 years, he said that the history of China and Australia is divided into two stages. 05-08 years, is the gestation period, when Liu and its team members are in Shenzhen Hi-tech Property exchange work, mainly involved in the exchange and the creation of Albert Cooperation, "South China Sea Growth Fund", and Xinhua Trust cooperation, "South China Sea Venture capital Portfolio Trust" joint management, During this period, China and Australia Capital team basically formed. 2009, China and Australia Capital was formally established, entered the second stage of development.

Focus on professional investment in the industry

China and Australia capital from the establishment of a total of 5 funds, the total size of the fund 1.2 billion, in the industry is not big, but are very distinctive. Among them, three growth funds are mainly invested in the middle and late project projects, VC funds mainly invest in early new materials projects, patent technology Special fund mainly for enterprises to provide patent technology licensing, and by the Sino-Australian Fund shareholding, the fund to obtain income distribution after the way.

In addition, China and Australia actively layout the West, in addition to last year in Ningxia set up a western new agricultural industry fund, this year will be in Kunming, Yunnan province to set up a western medicine fund. In view of the imminent implementation of the "Traffic separation audit" policy and the rapid development of the Western economy, China-Australia Capital believes that in the western region will have a greater harvest of cultivation.

The word "special" is the highest frequency in the conversation with Liu.

China and Australia to do VC funds, is to consider asset allocation, industry configuration and cyclical issues. At present, 30–40% Capital of China and Australia to do early, in this regard Liu early deployment. He said: "The middle and late projects are the General Growth Fund must be configured, because the fund management must consider the balance, such as: stage balance or investment cycle income balance, and risk balance, if a fund all do early, I think the risk is big, management pressure is also relatively big." ”

The establishment of new materials Professional fund is not a whim, but the need for a certain accumulation, China-Australia investment in the middle and late projects, new materials has been one of its main investment direction, in this industry has accumulated some experience, and within the company to cultivate new materials professional investment team, began to tap the new material industry early projects.

For the establishment of professional funds, Liu's judgment is that "the fund toward the direction of professional development is certainly the inevitable trend, should be done by their own areas to do through, that is, the previous investment in the width of three feet into a deep three feet, the formation of their own investment model, to build the core team in the field." "For early investment, there are no two brushes to be cautious." ”

Growth is the absolute truth.

For the recent industry investment stage moderate forward, PE investment VC phenomenon, Liu that is a pseudo proposition. He said, do not invest with the wind, not to go to extremes, said PE make money on the VC made Pe,pe do not make money on the PE into VC.

Whether a project has investment value, not because it is a PE project or VC project, the key is to see its growth. He cited, for example, if the enterprise now has 50 million net profit every year, enterprises to 10 times times PE, that is, 500 million valuation, many organizations will feel expensive, but in fact, to objectively analyze, if the enterprise face tens of billions of market, the next two or three years to achieve 2-3 billion profit, such a project Liu will not hesitate to invest.

Liu that the project IPO can not be regarded as a sign of success, the continued growth of the project is to measure the success of the investment standards, especially since last year, the stock two-level market continued downward, some investment projects even if listed, may not make money or even lose money. The growth of an enterprise is the eternal theorem that runs through the whole investment process.

The listing should be the second leap in the project, should still maintain high growth after the IPO, such fund investment at the end of the lockout period will be the secondary market to maintain a high valuation, the real more to earn a two-tier market capital premium. At the same time, "PE also to speak of social responsibility, can not sell the stock to the two-level market investors ran."

Targeting economic restructuring opportunities

Advanced manufacturing, biomedicine and consumer goods are the main investment direction of China and Australia, the reason of this investment strategy is to find the great business opportunities brought by China's economic transformation and upgrading.

"Eleven-Five" period, the Government called for economic restructuring, but at that time many enterprises did not respond, because the traditional industries still have money to make, enterprises do not have the power to achieve product upgrades, when the human cost is also relatively low, with the Chinese people's mouth dividend, labor costs, exports blocked, transformation and upgrading into enterprise endogenous demand. In this case, there is a blowout in the demand for the advanced manufacturing industry, which replaces labor and promotes efficiency. In the field of Advanced manufacturing subdivision, China and Australia are mainly concerned about the substitution of imported domestic automation equipment.

Liu, China-Australia capital in the automation sector has a total of more than 10 investment projects, including the most upstream of the basic functional materials, NdFeB, ferrite magnetic materials, this is the Automation field servo motor, stepper motor, such as the core components of the material, midstream, investment in the field of movement control and accessories of several projects, have developed production of motion control cards, PLC, servo-driven motor, there is a leading domestic man-machine interface development manufacturers, have a professional machine vision suppliers, and even invested in the machine tool guide rail soft belt, drag chain and other projects; Downstream Automation equipment Application field of more extensive investment, has a professional four-axis, six-axis industrial manipulator project, CNC machine tool project, intelligent weighing robot project , as well as automation pharmaceutical equipment in the field of medicine. These 10 projects have a high degree of correlation, mutual customers, suppliers, and the team is to find these enterprises through the track.

The biomedical field focuses on advanced medical services, animal vaccines, special Chinese medicine, testing instruments and reagents. In Liu View, now the entire domestic medical security system construction, more is "countryside" brings the opportunity, township health clinics medical equipment level is relatively low, equipment, medical standards and other aspects need to upgrade. However, China's pharmaceutical biology investment cycle is very long, and the domestic fund survival period is very short contradictions. China-Australia investment in a bio-vaccine enterprises, began production in 04 to do research and development, until 2012 only to issue sales, the enterprise in the past few years has been a loss, the cycle is very long.

From the foreign experience, foreign bio-pharmaceutical investment has formed a "baton" type of investment, in the seed stage, clinical phase, clinical two to get FDA certificate, each stage has specialized VC/PE for this stage of investment. So the fund will survive the next one, the formation of a very benign ecological circle, and China's biomedical field has not formed such an ecological circle. Therefore, in the domestic bio-medicine or to do a later stage, such as: vaccine enterprises get the vaccine new drug certificate, enterprises can produce immediately, then the investment valuation may be high, but the short cycle risk is small.

Liu that the bio-pharmaceutical enterprises in the two-tier market valuation is good, the future growth of better space. So in the biomedical field, the first look at market space. The second is to consider the duration of the fund. Since early investment began to do, biomedical projects are generally 10, a long period of investment in 15, for the Australian fund early indeed can not do.

Another major area of concern for China and Australia is big spending. Liu says consumption is a short plank in the troika that drives economic growth, and consumption is a healthy economic structure. In the personal consumption of this piece, China and Australia have been involved in the field of men and women, and children's wear and infant supplies increased concern. "My kids are just 4 years old and spending a lot of money on their kids every month," Liu said. "In addition, mobile games, such as internet consumption, food safety consumption, life upgrade consumption, cultural consumption, are also the focus of China and Australia consumer areas."

3W Principles for selected items

For the selected item, Liu said three standards concisely. One, the market space; second, the team; third, the enterprise's own growth logic.

His preference for large market space projects, for the Government to encourage the support of emerging strategic industries, such as: triple-net integration, high-speed rail industry and other Liu do not like, this industry can not evade the political risks of ups and downs. Wah O and Liu I am more good at consumer goods, biomedicine, new materials, advanced manufacturing, etc., in accordance with market rules, in line with the market objective logic of the industry.

The other is the team, Liu the enterprise team into three categories. One, the market-oriented team. Second, technical team. Three, red top businessman. His preference for a market-oriented team is also not promising for a team that is completely technical. "My technology domestic first, industry boss." "If the boss says this kind of words, Liu thinks, the enterprise certainly development is not big." Because technology to follow the market, technology to meet market demand, is really valuable technology. The team that relies on government relations to develop a single development, he thinks the risk is also very big.

No matter what kind of enterprise, must have its own internal growth logic, can be summed up in 3W. One, where, where is the growth? Two, what, growth depends on what, product or service is? Third, why, why there is growth, the inherent logic of growth? is the market reason, or the team executive power, or the industry has an explosive opportunity, which is very important.

Liu is amazing. "Now the IPO in the review of the enterprise growth at least half is false growth, through financial norms such as packaging out of growth", "after the listing of sustainable growth is ' growth '."

Prior to this, the Villery investment in China and Australia has been listed on the gem, is a landfill leachate treatment enterprises. At present, garbage landfill and incineration mainly, such as rainwater soaked, will seep landfill leachate, causing a lot of groundwater pollution, and the government has a mandatory policy, so 3--5 year, landfill leachate has a very large growth space.

Villery was one of the first companies to invest in Germany, landfill leachate treatment technology from Germany, but the company simply pursue technology leadership, do not understand the Chinese market, so in China has been unable to large-scale sales, 06--07 year through the management buyout, team leader Li Yuezhong is the Doctor of de Tak, Regardless of the technical market judgment or the marketing ability is very strong.

When China and Australia invest, the Villery scale is also small, belong to the long-term enterprise, due diligence to see the company's intrinsic growth is good, Liu said, the success of the investment is not based on IPOs, but look after the listing, with the help of listed companies platform, capital support, after the listing of brand communication, mechanism support, to maintain faster growth. Villery after the listing, really play a listed company platform of various supporting advantages, all aspects of development is very fast. China Australia's shareholders, the project's a-round investment in Chinese venture capital, from the entire project received a 20 times-fold return, and Wah O also received 6-7 times the return.

New materials and biomedicine are also good for Liu, in bio-medicine, he invested in new industrial biology, Kang Biological, pharmaceutical equipment Shang hair, Liu relish his investment in the new industrial life 2011 years compared to 2010 5 times times, and this performance has a strong continuity, is a typical high growth project. Prior to the investment of the good creation of the video last September has been listed on the gem.

In addition, we have to mention the investment in cultural industry. Culture is the largest entertainment consumption, with the Shenzhen radio and television combined with the "painted Skin" investment test water is very successful, 1.5 received about 30% of the return. Liu said, "as a fund, my core or investment enterprise," The Painted Skin "test water although successful, but then did not invest in the script. ”

Provide real service

Liu Frankly, in the value-added services are also constantly groping, first of all, investment will take time and energy. Many organizations "invest heavily, light service", "You have no material, the entrepreneur and you contact to know." "If you do the listing operation, there are professional brokers, investment agencies to publicize this aspect of the service is mostly" fooled.

So Liu that, the real service, one is to spend time to spend energy, monthly needs and the company high-level exchanges, understand the enterprise situation, to help enterprises diagnose problems, advice, although simple, but can do not much. Second, the supporting human resources services. Help to find the financial Director, marketing personnel, and even the Secretary of the Secretary, as a wide range of contact investment institutions for the enterprise to solve the problem of the most practical.

In addition, industry resources are also important. can help enterprises to provide matching up and down travel, suppliers and customer resources. Therefore, China-Australia capital advocated to do industrial chain investment, so as to better help enterprises, the integration of resources between enterprises is also more convenient.

There is also the need to work with banks and guarantee agencies to provide financial resources for enterprises to solve the immediate needs. Before, with China Merchants Bank, Societe Generale cooperation is very good, after the investment, the bank has to follow up, the combination of investment and credit is very good. China and Australia invested in a smart card port system of the aviation Intelligence company, when China-Australia investment, merchants Bank to follow up to make a sum of 10 million yuan loans. In addition, the background of China and Australia, as well as the local Yuan PE, in the government resources have also given the enterprise a lot of help. such as trivial administrative examination and approval, environmental protection, industry and commerce, taxation, customs, including the Government's special financial support, these aspects have been implemented.

China-Australia's investment management summary, is to provide "real" services.

Breakthrough from Homogenization

Earlier VC institutions PE, are chasing the IPO project run. Now the income narrowing, the valuation hangs upside down, the investment risk is more and more big, then invests again now to invest in the prophase, Liu said this is a "false proposition". Liu that the risk of early investment industry is very large, professional degree has a strong demand. Only growth, he says, is the only criterion for project investment judgments.

This year, the market is different, both early and middle and late investors are very cautious, institutions also began to 28 differentiation, tide Amoy, a lot of investment project risk is gradually emerging, such as: Photovoltaic industry, battery industry. Liu said that from the end of last year to this year, and even next year, the shuffle trend will continue to appear.

2000, Shenzhen on the emergence of hundreds of venture capital institutions, 03 04 years, Liu know a lot of friends in the investment community that, when the gem did not launch, the project can not be realized circulation, so they have withdrawn from the venture industry. to 05 to 06, really insist on doing business also on 20 dozen, including deep venture investment, fortune, the same creation Albert, these institutions in this cycle has become the leading VC companies. If the 2000-year gem launched, so many organizations have made money, the gem delayed the introduction of a group of institutions have been eliminated.

With the 06 07 split share reform completed, 09 years of the launch of the gem, venture capital industry experienced a round of rapid development.

07 began to raise the establishment of equity funds, the basic completion of the collection, investment, management, retreat of the round cycle, the annual compound growth can do 30%--50%, now such a prosperity is no longer. And this shuffle by Liu called, PE industry's first round of small cycle. To practice good internal strength to survive, the market has a cycle, the industry also has a cycle, but investment opportunities and space is still very large. It is a low tide and a turning point. Enterprises also want to survive the economic downturn, including foreign Hewlett-Packard, IBM have experienced a low ebb period, we must learn to turn the tide of crisis.

At present, the whole ecological system of domestic PE is not perfect, including LP mentality, GP specialization degree need to improve and adjust, in addition, "Heavy investment, light management" phenomenon is serious, "investment, management, two fists must be hard, go hand-in-hand." ”

Liu that the investment industry homogeneity serious, want to from the homogeneity of "breakthrough", Specialization is "Breakthrough" the best shortcut.