Strategy has been set, go International, Fosun ready?

Absrtact: If you compare the history of the two sides, Carlyle Group was founded in 1987 and Fosun was founded in five years. 23 years later, Carlyle is active in the global private equity investment market, becoming one of the world's best-known private equity groups. 18 years later

If you compare the history of the two sides, Carlyle Group was founded in 1987, Fosun was founded in five years.

23 years later, Carlyle is active in the global private equity investment market, becoming one of the world's best-known private equity groups.

More than 18 years later, Fosun raised the "management of trillions of assets", the path of the realization, relying on global funds, "money management", investment in globalization and managing globalization have to go hand in hand.

This is just the beginning.

Four steps.

"From the Carlyle Fosun Fund, you can read about the top two strategic changes, or progress, of Fosun." The first progress, can obviously see Fosun internationalization strategic intention and action. Second, it is obvious that Fosun began to involve asset management. We have not mentioned these two things in the past. Said Liang, CEO of Fosun.

From the past, Fosun's attempt to go outside has already had some foundation and exploration.

First of all, Fosun's own subordinate plate has begun to test water internationalization. Product sales, such as in the pharmaceutical and steel sectors, have entered overseas markets. Product sales to different markets, balance the Fosun face market volatility.

In the capital sector, affiliated companies, such as Forte, are listed through Hong Kong and the United States, gaining overseas support in open capital financing channels. Fosun International itself landed in Hong Kong's capital markets.

Second, after the internationalization of products, Fosun has repeatedly reaped the gains in international investment. Fosun in the first two years, began to invest in the audience, Tongji Hall, such as listed overseas Chinese companies, this type of company advantage is in the integration, there is no transnational cultural running-in problems. Affected by the overall financial crisis, Chinese assets have become relatively cheap overseas, while earnings are still good, buying at low prices overseas and full of profit opportunities.

Third, in this step, Fosun began to study the pure overseas companies, which were in the market under the financial crisis, and the stock prices were very low. But its products and services may still have room in China, as long as it can find a "second battlefield" in China, or Fosun's investment target.

In response to this type of asset, Fosun will have to have the expertise to conduct research on overseas assets in the future, and have the ability to manage the larger shareholder, with accurate predictive judgment and help the investment company achieve China's growth performance.

Information on such assets often requires support from a range of future overseas collaborators, such as Carlyle, to help Fosun get trading information "easier and quicker".

Finally, the Fosun is looking for and buying the capital of the pure European and American Day. At present, Fosun has not yet begun to attempt this. Because this asset does not have a third because of the temptation of the Chinese market, Fosun's opportunity lies in whether it can provide world-class management capability output to achieve "internationalization of operational management".

How to achieve the internationalization of operational management, this and many local enterprises such as Lenovo, Tcl, such as the path of confusion. There are also various methodologies. such as TCL continue to use Alcatel brand, channel to expand overseas markets, Lenovo through the purchase and IBM PC to help themselves upgrade the whole line.

The domestic first-class enterprise standards and international docking, not only contains product standards, service standards, but also included in the brand, technical aspects with international standards. This is the problem that Fosun needs to overcome before the lessons and experience of the past.

A shortcut to an international platform?

Strategy has been set, go International, Fosun ready?

During the panel discussion at the annual Fosun meeting in late January 2010, the moderator continued to interrogate the leaders of Fosun and the International strategy and preparation of the companies that were being invested with aggressive questions.

Someone answer at the dinner, some slightly pale.

The answer is not important, and the question itself is an emphatic sign. 2009 Fosun has established an international department that will be the strategic focus of internationalization in 2010.

Also at this meeting, Fosun senior hired snow as board advisor. Snow is a former Treasury secretary and chairman of the Cerberus Investment Management company and has extensive connections in the U.S. business community.

Snow believes that "Fosun's own multi-industry chain has more opportunities in overseas markets", and in a video conference between the two, snow began advising on potential projects and how to build overseas brands for Fosun.

In addition to the high-profile hiring of snow as a consultant, Fosun's top executives said there would be a series of partnerships with international private-equity firms, investment banks and insurance agencies in 2010, and plans to build an investment team in New York, Japan and Australia this year.

After just one spring festival, Fosun announced a series of collaborations that will be launched in 2010 years: The Carlyle Fosun Fund.

In the past few years, domestic GP raised renminbi fund recount. Sequoia, for example, obtains a lot of domestic LP resources through its wealth management company, and Germany, while creating its own renminbi fund, actively cooperates with various local funds to guide the Fund; the first east and the Black Stone, which has been registered in Shanghai's Pudong industry and commerce, have struggled to secure the support of surplus funds, insurance

Only the development of RMB Fund LP resources is not enough for Fosun.

The emergence of the Carlyle Fosun Fund, a visible effect of Fosun's "managing money to trillions" goal, is that Fosun has access to Carlyle's 23-run Global LP network through the Carlyle Fosun platform.

Wonder Liang said, "China now has a lot of money, in the long history, 50 years, you just see these two years a lot of money, the future?" "In the domestic and foreign two hands to raise funds, seems to be a more comprehensive financing channel arrangements."

The significance of Carlyle Fosun Cooperation can also be considered from another dimension: a private PE with management and investment function should be promoted to international platform.

For example, since the establishment of overseas backgrounds, international vision of the team. Would it be a reliable option to refer to Lenovo, or Acer, to allow a foreigner to navigate the internationalization of an entity during a transition or a long time? How to find such a foreigner immediately, how to running-in? Who's the Boss?

One of the Fosun's departing people denied the possibility. Ultimately, he believes, it will be difficult to communicate with Fosun's top executives by understanding overseas and domestic Chinese investment talent to harness such a team. The Chinese investment talent who can manage a bunch of expatriates is a scarce resource.

A relatively weak investment brand in the international market, to be promoted to the global arena, perhaps as Fosun CFO Ding said, the other way is not not think, "with Carlyle a shortcut."

Coincidentally。 When entering the Chinese market, 3i Group has also invested in China project, while investing in the Ding-Hui two fund to learn China's path.

Kereby 3i Group Further, from the Fosun can learn to deal with the state-owned enterprise project "skills." And Fosun through the benefit of sharing, "into the enemy inside", you can learn firsthand investment experience, network, incentive mechanism and so on.

Equally important, the Carlyle Fosun Fund has the imagination to raise money overseas.

Devil in detail

Topaz, managing director of Bain Capital, has referred to some of the "details" of overseas investment in a paper published in the media on how to cooperate with PE.

He pointed out that the success rate of overseas mergers and acquisitions is very low, because cross-regional, cross-cultural brings many problems.

In a case of mergers and acquisitions, enterprises will encounter a series of important problems before, after acquisition and acquisition.

Details to what extent, such as quote should be a high price "fishing" to live each other, slowly lowered, or at the beginning of a reasonable price? These details must study each other's past style, the so-called experienced team, may be members of the past have dealt with each other's preferences and tendencies have been understood.

"If the future of Carlyle and Fosun in the global field of comprehensive cooperation, must be in front of the investment to communicate a good form of cooperation, investment methods, specific links to find special people responsible." In the operation of the interlocking, the two sides designated their own people, in the company with the investment, the relevant investment banks, accounting firms, law firm Stick, once there is a problem, these organizations know which contact contact, to maintain smooth and effective communication, to prevent the emergence of multiple versions of the story. These cooperation details need to be mastered. ”

The analyst mentioned that domestic enterprises are not particularly familiar with the foreign countries, in the investment channels, investment methods, and how to do surveys, how to do with good prices and other details, but also lack of experience.

A person close to Fosun told reporters that the challenges of Fosun's internationalization would arise in salary design, investment project Services, and middle-level management.

For example, a few years ago, Fosun's position as an investment manager was 10 times times worse than the U.S. salary, and the bonus part was not comparable.

How big is Fosun's ability to pay for senior talent? "From the principle of Fosun's investment, you may want to find someone who is more cost-effective, and see if it is willing to make that money," said the analyst. ”

Liang a few days ago, he went to dig a Wall Street person in the United States. The other party originally paid 500,000 dollars a year. Liang first with the other side, 500,000 of the price is indeed not low in China, in the United States is not low.

He continued to "cheat" on this man, in China if a boss only earns 500,000 a year, in the Zhejiang Chamber of Commerce has only membership, the Director is certainly not qualified.

"You get 500,000, 1 million dollars, incredibly began to enjoy, I can only say your eyes very short-sighted." In China, you take on a part of the risk, but you have the potential to enjoy high returns. ”

Liang is optimistic that his work experience and successful experience in an increasingly important part of the world will make some people willing to give up some short-term benefits.

His lobbying "selling point" actually lies in the future imagination space of Fosun's development.

On this issue, one of Carlyle's founders, Danield Annilo, has also provided some experience. The pay levels of Carlyle's different businesses and regions vary. In this case, if such an organization and a company is global, it will be based on different market conditions, the same seniority of the same person, so as to ensure that the level of remuneration is reasonable, to a large extent, this rough and broad adjustment, but also based on Carlyle's own judgment.

It is too early to arrange incentive arrangements for foreign investment teams in the future.

However, in the immediate Carlyle Fosun Fund, Ding said the pay standard must be on par with Carlyle.

At the same time, the person also pointed out that although Fosun has been emphasizing the "ownership of resources", but the lack of a centralized sector to vigorously mobilize the company's resources to the company for long-term tracking and service.

But since it's long overdue (internationalization), it's better to do it early. Now the Fosun platform is large enough, and it can be borne if there are some minor mistakes in the early days of the (internationalization). The analyst said.