Three investment subjects at different stages of investment

"Industry and investment are not contradictory. Lenovo's chairman, Liu, explained the arrangement of Lenovo from industry to investment. Since 2001, the establishment of Lenovo Investment (then June-Lian Capital), to 2003 Hong-Yi Investment listing, and then to the 2008 formation of Lenovo Star, Lenovo Holdings in the investment area, the operation of the arrangement is not inferior to the expansion in the industrial area speed. Correspondingly, their position in the entire Lenovo Department is becoming more and more prominent, which is not difficult to see from the existing business layout of Lenovo Holdings.

According to Lenovo's current structure, in its three strategic business, the "Lenovo star" incubator investment and core asset operations and asset management, while the Hongyi capital investment is the asset management plate under the fund investment part.

With the general market-oriented investment agencies to start a different one, June Lian Capital, Hong Yi Investment and Lenovo star from the beginning from the back of Lenovo holding this mountain, "with a golden spoon born" is destined to go more smoothly, get more attention and resources. "The first financial journal" found that the first phase of the capital, Hong Yi Investment and Lenovo Star is from Lenovo Holdings itself. In the words of Mr Liu, in the absence of experience forced to raise other LP's money, if the other people's money to compensate for the bad, should take their own money to pay tuition.

Facts have proved the correctness of this judgment. The one-phase fund of the June-Lian Capital received a 7 times-fold return, and Hong Yi investment in state-owned enterprise reform case of fame, also laid its leading position in the PE industry, Lenovo Star is because of Liu's power and Lenovo holding the support of the Group of Angels in the rapid rise of the community.

A person familiar with Lenovo Holdings told reporters that in Lenovo this large plate, in fact, more focused on the industrial development, as for the asset operation of the layout also has a purpose to provide financial support for industrial development. "Whether it is to do agriculture or into the chemical field, behind the demand for funds are very large, and these industries are cyclical industries, performance fluctuations are more obvious." However, the VC/PE field of business due to enter a long time, accumulated experience, asset size and income can be guaranteed, can do to Lenovo holding a good and stable income. "he said. In addition to the continuous creation of cash flow, the operation of core assets and the investment of incubators, it will play an important role in the core asset project repository.

Lenovo's Investment Chess

Lenovo's involvement in the field of investment can be said to be accidental, but also inevitable.

2001, Lenovo Group in the field of PC manufacturing and it distribution occupies a dominant position, according to the needs of the business development at that time, split into the computer business and the Lenovo Group engaged in the distribution business of the Digital China group, in the two major business groups on the establishment of Lenovo Holdings, the formation of investment-holding group

After the split, the parent company Lenovo Holdings relies mainly on Lenovo Group and digital China to pay profits to survive, shareholders believe that the two companies are in the high-risk IT industry, development may not be stable, must spread the risk of higher returns to give them the opportunity to make mistakes, but for Mr Liu, Also has been hoping to build Lenovo holdings into a world-class scale of enterprises, can make the foundation evergreen.

Thus, in the hope of "using funds and management to help and promote the growth of Chinese enterprises", Lenovo holding president and the founding partner of Zhu Linan Capital, president and managing director of the company entered the field of investment, formed the Lenovo Investment, focus on early venture capital and long-term investment opportunities, Lenovo Holdings of 35 million of dollars as the first fund, and only focus on Lenovo's main industry-related major IT areas, including Internet applications, chip design and key components.

At present, June Lian capital of the total management of five U.S. dollar funds, two yuan funds, the total size of more than 13 billion yuan, focused on the operation of the main operating in China and the market and China-related innovation, growth-oriented enterprises, the industry throughout TMT, health care, consumer goods, clean technology, advanced manufacturing and modern services

Mr Liu has given the Royal Alliance a highly-rated capital. Last year he said publicly that they had made a big contribution to the company's holdings of the capital.

It is with this open road, after the June Lian Capital small test, Lenovo Holdings soon spawned another platform, that is, Hong Yi investment. Since its establishment in 2003, Hong-Yi Investment in the management of five dollar funds and two yuan funds, the total amount of management funds more than 45 billion yuan. Except for the first phase, which all came from Lenovo Holdings, investors in the fund include the National Social Security Fund, China Life and the Temasek, the Stanford University Fund and other investment institutions. It is particularly worth mentioning that Hong-Yi Investment and the Royal Union capital of their respective two RMB funds together with the National Social Security Fund favored.

In the industry, Hong-yi investment is determined to be located in the large-scale PE institutions, a merger fund, a familiar with Hong-yi investment PE peer told reporters, the domestic PE mergers and acquisitions of institutions not more than 5, because of the fund management team's professional ability to operate higher requirements. If the general PE from the perspective of understanding, Hong-yi Investment in the domestic PE echelon ranked top three.

This industry recognition has a direct relationship with the investment position behind it. Hong-yi Investment in the industry is most famous than the successful restructuring of state-owned enterprises. As early as the establishment, Hong Yi Investment team spent nearly a year of in-depth research, on the one hand to recruit McKinsey from the industry point of view to find 10 noteworthy industries, on the other hand ran to the country to investigate, and finally decided to state-owned enterprise restructuring and industrial integration as the starting point of operation, and then gradually

A person familiar with Lenovo Holdings told reporters that for the three investment subjects at different stages of investment, such as June Lian Capital, Hong Yi Investment and Lenovo star, there were some opportunities behind their birth.

"June Lian Capital was established in 2001, VC in the domestic development is still in the initial stage, the corresponding investment institutions are not many, coupled with a wave of internet development opportunities, destined to the royal Joint Capital in the beginning of success." For Yu Hongyi investment-led PE, in the 2003 ~2004 years of intervention in the field of state-owned enterprise reform, undoubtedly also caught the hot spot. The Legend of the Angel investment field is in keeping with the upsurge of entrepreneurship and the prevalence of angel investment in China. said the person.

Report

According to the information disclosed by June Lian Capital website, as of November 2012, June-Lian capital injection of more than 170 enterprises, of which 20 were in the United States, NYSE, NASDAQ, Hong Kong Stock Exchange, Taiwan Cabinet Buy Center, Shanghai, Shenzhen stock market, including the formal establishment of the June Joint capital investment after the first project Hkust flying ( 002230.SZ), July 2001 investment, May 2008 in the SME market; November 2002 investment in the exhibition communications (SPRD. NASDAQ) was listed on Nasdaq in 2007. According to the reporter statistics, June Lian Capital in 2007 and 2010 each have 4 enterprises listed, 2011 is ushered in the tide of listing, has Shanghai Green New (002565.SZ), Renren (Renn. NYSE), Spectrum Rui Technology (4966.TWO), Angelina Technology (002635.SZ), Xinhua Insurance (601336.sh,01336.hk) in different plates listed.

In addition, June-Lian Capital has 12 of the investment enterprises through the acquisition of the way to achieve exit, including excellence nets, zhaopin, oak interaction and so on.

The record of Hong Yi investment is not bad. According to the data disclosed by the website of Hong-Yi investment, more than 70 enterprises have been invested, as at the end of 2012, the total assets of the company were 1.6 trillion yuan and the total sales amounted to 520 billion yuan.

After the establishment of the second year, Hong-Yi investment is restructured Jiangsu Glass Group, a year later, after the reorganization of China Glass Holdings Limited (03300.HK) in Hong Kong board successfully listed, but also introduced the world's leading glass manufacturer Pilkington as a strategic investor, This service has laid the investment of Hong Yi in the River Lake position. Since 2006, Hong Yi invested in the Zoomlion (000157.SZ), 2 years later, Zoomlion, with the help of Hong Yi Investment, Goldman Sachs and Mandarin Fund, has acquired one of the three major concrete machinery manufacturers in Europe and the United States CIFA, ensuring the global leading position of zoomlion in the concrete machinery industry. In addition, Hong Yi investment in other successful cases include Boulder Group and Stone Pharmaceutical Group.

In addition, Hong-Yi investment from the restructuring of state-owned enterprises started, gradually involved in private enterprise, 2005 investment in the Pioneer pharmaceutical (SCR. NYSE) at that time was only a second echelon of drug sales enterprises, after the stake in Hong Yi investment from the system, mechanism, management, strategy, internationalization and other aspects according to the actual enterprise to carry out a large number of transformation work, 2 years after the successful launch of the drug industry in the NYSE. Other investment projects include Boloni, Longhao, China Soft International and Suning appliances (002024.SZ), which had made the team quite stressed last year. In addition, the investment of Hong Yi also tentatively tried some cross-border enterprises, including CIFA, international and other enterprises.

Lenovo star in the responsibility to undertake training outside also began to extend to the field of investment, at the end of 2009, Lenovo Holdings set up a first 400 million Yuan Angel investment fund, Lenovo Star began as a super Angel to focus on the Internet, advanced manufacturing, health care, a single project investment scale of about 1 million U.S. dollars. At present, more than 30 enterprises have been invested, and the total investment is close to 200 million yuan.

Confusion in investment

China car Rental is a Lenovo inside the system of the project, although Mr Liu has repeatedly bullish on the interaction between these investors, but at least in this investment case has not let this linkage bear fruit.

As early as 2006, June-Lian Capital as a strategic investor in the construction of the Shenzhou car rental, initially as a capital investment case, and later because the recommendation to the Lenovo Holding direct investment department led to the 2010-year Lenovo Holdings in the form of "equity + debt", to the Shenzhou car rental again 1.2 billion yuan, into a controlling member enterprise.

Zhu Linan previously said: "For the Shenzhou Car Rental fund support will continue to be, how much to how much." However, last year, the Chinese car rental cars because of the integrity of the stock crisis was forced to cancel the Nasdaq listing applications.

After that, the Shenzhou car quickly got a 200 million dollar capital injection and the industry-leading company Hertz's shares. Have contact with this project PE peer told reporters that the car rental industry is essentially a heavy asset industry, enterprises with each other in horse racing when the cost is very high, the profit needs a certain scale, but time will drag very long.

The only time the China car rental to disclose its real data is in the SEC to submit a prospectus, according to the prospectus, the company 2010 net loss of 1273% to 43 million yuan year-on-year growth, 2011 years ago 9 months net loss year-on-year increase 443.7%, reached 117 million yuan.

Also hit the heavy money and Hong Yi investment. Because of the diversified investment strategy of holding acquisition, minority equity Investment and cross-industry investment in the specific operation process of the large PE institution, the great risk of holding acquisition is balanced by the minority equity investment of unlisted enterprises and the participation of the listed companies. Such positioning also determines the investment of Hong Yi in the project capital, for example, since 2005 its accumulated investment in zoomlion nearly 2 billion yuan, at the end of 2012 in the group (000039.SZ,02039.HK) investment 174 million U.S. dollars, 2012 in Suning appliances (now Suningyun business, 002024.SZ) project invested 1.2 billion yuan.

But at present, many major projects are in the industry adjustment, such as last year's shares of Suning appliances, in the purchase of the book floating loss more than 30%, today, its share price has only been restored to Hong Yi investment in the original price of 84% (the stake price of 12.15 Yuan, yesterday close to 10.26 yuan). Lenovo Holding executive vice president, Hong Yi Investment President Hony in the interview with other media, but Fan Hongyi identified the main industry, even if not clear when to go out of the trough also to invest, its resistance cycle tool is long-term hold. He to suning appliance investment examples, in his opinion, he does not care about Suning appliance stock price is how much, can be a piece of electricity quotient, Suning is the most secure investment.

The above familiar with Hong Yi investment PE peer told reporters, Hong Yi investment in the industry's strength has been the state-owned assets reorganization, because of its own close proximity to Lenovo Holdings, so that in the operation of such projects have a considerable advantage. But some market-oriented projects, such as the shares of private enterprises, such projects are often other investment institutions have the ability to compete, this Shihong investment advantage is less obvious.

And for Lenovo Star, its basic business model has been the relish, "entrepreneurial training + Angel investment + Entrepreneurial alliance" in the form of the selection, absorption of a certain scientific research, and itself more suitable for entrepreneurial science and technology leaders, After targeted, free training, select entrepreneurs who think they have more potential or are in a relatively mature phase, and then invest them through the Lenovo Star Angel Investment Fund.

It is undeniable that this model has certain advantages in mechanism. In Lenovo star general manager Tang Xudong, it is precisely because there is an important function of entrepreneurship training, so that the team has a longer time, a wider range, and these technology entrepreneurs have a very deep contact with the project understanding is more profound, so the accuracy rate is relatively high.

However, Lenovo Star's return, the outside has been frequently asked questions. In this regard, Tang Xudong told reporters, now Lenovo star has not yet walked through a reincarnation, for a 2-3-year investment agency, now talk about return is too early. But he also does not deny that after the Angels can not go all the way after the end of the enterprise, must be responsible for the enterprise set up the path to the enterprise's value, so that the other VC phase. According to him, some projects now have a clear exit path, but some projects are also in difficult times.

Those familiar with Lenovo Holdings said that Lenovo star at this stage to do angel investment more or with a public interest, angel investment itself, the success of the risk is low, the performance of the investment enterprise fluctuations, Lenovo star to be able to maintain sustained and stable annual growth has difficulty. "It would be more difficult if Lenovo had to expect to make a big business out of Lenovo's star," he said. ”

Investors at a local PE agency told reporters Lenovo Holdings may have more resources, but it also means that the main body can not get rid of large companies to do some investment, and sometimes standing in the group strategic point of view, such as simple market-oriented institutions generally to evaluate some projects to cast good and bad, Backed by big companies is an advantage for such investment institutions, but sometimes it is a kind of imprisonment.