Rethinking the "PE factory model" Investment spin down

Absrtact: A partner's resignation once again let Kun Wu jiuding Investment Management Co., Ltd. (hereinafter called Jiuding Investment) has attracted much attention. In the present, we are interested in not who is gone, but the information reflected in the back, jiuding investment what? A PE partner on the

One partner's resignation once again let Kun-jiuding Investment Management Limited (hereinafter called "jiuding Investment") attracted much attention.

"In the present, we are interested in not who is gone, but the information reflected behind this, jiuding investment?" "A PE partner on the" China Business newspaper, "the reporter bluntly, as the national PE wave in a dark horse, jiuding investment in every move has the significance of Vane: In the past few 5 years, From the management scale of only 176 million yuan a fund grew up to manage the accumulation of more than 20 billion large scale PE, jiuding investment in the industrialized mode of investment in more than 200 projects.

Barbaric growth at the same time the cumulative problem is not small: the stall is too big, cast a case too much, now the IPO market is not opening the gate, can not exit the contradictions unprecedented fierce, the flow of people is only a contradiction of the manifestation.

IPO ice more than a year long, to cast IPO as the characteristics of jiuding investment, the impact of geometry? The transition path of jiuding investment is undoubtedly worthy of attention.

Rethinking the "PE factory model" Investment spin down

In the past two years, Jiuding invested in a number of projects: 2011 for 80, about 40 in 2012. For jiuding investment is different from PE traditional play, peers and the outside world to it affixed such as "PE factory" "Spoiler" "Public Enemy PE" and other labels.

October 2009, Jiffeng Agricultural machinery and Jinya technology at the same time become the first batch of 28 enterprises landing gem, it is this case to make jiuding investment overnight fame. At that time, jiuding investment has yet to show its "madness". It is understood that before March 2010, Jiuding invested in less than 20 companies.

Subsequently, jiuding investment in its unique mode into the development of the "fast track." At the peak of PE bubble in 2011 and 2012, jiuding investment into one of the most active PE institutions, many times by the industry organizations as the best PE investment institutions.

According to Jiuding Investment founder Huang said that before the jiuding investment characteristics, mainly to IPO projects, they to the China Securities Regulatory Commission of the standards to select enterprises across the country, in line with the listing conditions of the investment.

"What items can be listed and not listed is very clear." This is like a layer of oil on the surface of the water, pure technical work. Huang once said. In order to seize this opportunity, jiuding invested in tactics, and was filled with a team of project developers everywhere.

For the jiuding investment model, there are former jiuding people to reporters that any model has the desirable place, the model as long as appropriate.

In the past two years, Jiuding invested in a number of projects: 2011 for 80, about 40 in 2012. And for jiuding investment is different from PE traditional play, peers and the outside world to it affixed to a variety of labels, such as "PE factory" "Spoiler" and so on.

At that time, some of the sound PE institutions have basically tightened their own money bags. For example, the Shanghai investment run has been suspended since May 2011, until 2013.

Jiuding investment has slowed this year. "So far, we have invested in 200 companies, investment in the amount of more than 15 billion yuan." Jiuding Investment Partner Kangqing told our correspondent, this year jiuding investment as well as other PE also lowered the speed down, reducing the amount of investment in the project.

In order to "exit" the Transition

Mergers and acquisitions are gradually becoming an important channel of PE exit, jiuding investment approach is to the enterprise, and then carry out some business synergy, the same industry chain up and down the integration.

However, Jiuding, a factory-style approach to investing in the first few years of the boom, has harvested a lot of projects but must now confront the dismal IPO market.

When will these 200-odd projects be enough to exit? By contrast, jiuding is more stressful.

Indeed, for the investment IPO PE, it is somewhat rely meaning. A-share IPO stopped for more than a year, the common suffering is waiting for the listing of the company and behind the PE.

Up to now, in the jiuding investment of more than 200 enterprises, has listed less than 15 projects, through mergers and acquisitions to exit the case is very few, a case is just completed in the state and the pharmaceutical industry by the Shanghai Levin merger exit. In more than 5 years, the successful exit of jiuding investment case is less than one-tenth.

Another data show that, although the list of listed companies in the IPO queue, jiuding investment in the absolute number of enterprises, but also the largest companies to withdraw the body. According to data from the Chingko Research Center, the 6 companies jiuding invested in the IPO were withdrawn before the IPO financial verification phase ended.

The above data means, mainly depends on the performance of the PE team can not "eat enough", from the LP (Fund investors) pressure is not small.

Another pressure is that, as of now, jiuding investment has not yet completed the liquidation of a fund – meaning that some of the jiuding funds have been forced to postpone and investors are unable to share their performance.

This also directly led to a change in the jiuding investment personnel.

For the flow of people, Kang Qing Shan Tan Chen, the employees who left the majority of the development project, it is well known that the current project is not easy to find, but also difficult to cast, and this is closely related to their incentives, so the separation is normal. "The company's core investment team has been stable. We emphasize the team, is the team combat, not a person's merit. ”

In the unrest, the project can not be withdrawn, according to reporters understand that jiuding investment in the same plan to upgrade and transformation of the road, trying to enter mergers and acquisitions, debt and even two-level market funds and other fields, however, all of this points to the digestion has been invested projects.

"Jiuding investment has been in the original business model has been upgraded, abandoned the traditional way of equity investment, in the past to the price of looting projects, now we will take the idea of industrial operation to operate the project, in the money, bring industry resources." "Kangqing said.

Jiuding investment partner Caile that in the new era of PE, the real meaningful PE capital should be both financial and industrial capital characteristics. A good PE organization should be the financial capital of the way to raise management and assessment, but at the same time in the form of industrial capital to operate investment and operation.

Mergers and acquisitions are becoming an important channel for PE exit. It is understood that the practice of jiuding investment is to target the enterprise, and then carry out some business synergy, the same industry chain up and down the integration. For example, the election of a company as a platform to integrate upstream and downstream enterprises, through the increase of capital (may be equity may also be the debt) to help enterprises continue to buy a bigger. It may also be through directed additional or even large-volume transactions to participate in listed companies, and then assist in the implementation of industrial integration mergers and acquisitions, and the acquisition of the object may include the investment enterprise, to achieve exit.

"We do both at the same time, and may help the investment enterprise to seek the acquisition target also may help it to be merged, simultaneously also will participate in the listed company, through the listed company this platform to realize the merger." "The specific model is more flexible," Kangqing said.

It is noteworthy that the current jiuding investment has not set up a special acquisition fund. "It's still about mergers and acquisitions with former equity funds. We are in contact with the cooperating agency to launch the Debt Fund and Securities Investment Fund. "Kangqing said.

However, Kangqing repeatedly stressed that these new businesses are around their core competencies and main business, around the investment enterprise resources to do. "The future main business or equity investment, but the proportion of business will be reduced." ”

In the eyes of peers, the current practices of jiuding investment and the so-called transition are the rapid development of the past "lessons." In the past, the one or two-tier market price difference is very large, but also investment IPO, many PE ignore the value-added services to the enterprise.

Kang Qing Shan also recognized that the one or two-tier market spreads to obtain profits has become increasingly difficult. "PE profit mainly depends on two pieces, one is the growth of the enterprise itself, the second is the one or two-tier market price difference." But the latter's narrowing is a clear trend, and we have to profit from the growth of the business. ”

Analysis of the industry, jiuding investment or will be involved in mergers and acquisitions, debt and two-tier market funds are for the investment enterprises, in helping enterprises to grow at the same time to solve their own sets.