TPG Global partner Wang 兟: We're in the service industry.

June 4 Morning News, TPG Global partner Wang 兟 at the 12 China Venture capital Forum held in Shenzhen today to address the issue of PE supervision, he believes that PE is engaged in the service industry, but also should be self-discipline of the industry, PE companies should learn how to manage their own,　　In addition, he revealed that TPG had raised 5 funds in Asia from the first phase of the new bridge in 1994 to the TPG Asia fifth in 2007, with the latest issue approaching $4.2 billion trillion. The following is the full text of the speech: sing: First to tell you a sorry, I may be the most thankless speaker of the day, the three big challenges, the first to follow the program has ended 15 minutes before I started, and second, you have to eat lunch because of me and affected, the third challenge is today's topic to talk about regulation, The two guests in front were very exciting, but they didn't talk about regulation, the only pressure is on me, and I was not prepared to talk about it because I thought it was a disciplined industry, and I didn't have a lot of experience working in government or regulators, and it was hard to talk about it, even in America, How to regulate PE is just the beginning of the topic, is also full of controversy.　　So I was ready to talk about self-discipline, PE company how to manage their own, so in such a premise, please forgive me first such three major defects. But I think the topic of self-discipline is very interesting, first of all, it is suitable for our Chinese culture, from Laozi's moral sutra, to Liu Shaoqi on the Communist Party's self-cultivation, all is about how to be a person, to do their own good, the supervision of the problem said. So today, let me have a deeper understanding of TPG, how we do TPG, how we manage our company, and we hope to enlighten you.　　I know the time is very late, if anyone wants to eat early, I will not have a problem. TPG is an investment group that manages close to 60 billion is a traditional one of the four major, this is a multinational enterprise, in more than 10 countries have institutional companies, we are different from some PE fund companies, such as dozens of management funds, but also different from only one or two, we are probably a group of funds, That is, the 10来 fund, which manages nearly 60 billion of the funds.　　But we have a unique management culture, I will give you an autopsy. Before entering the anatomy of our culture, I would like to emphasize that two points, the first is that any enterprise culture is usually by two things, the first is their belief, the second is his experience, he has experienced in the development process of the enterprise. Here's a very interesting part of our credo today, and one of the important words in our company's Creed is that we are in the service industry. It sounds very simple, and a lot of people disagree after listening, in fact you think carefully, a lot of PE people feel that they are making bosses, I am creating wealth, I am creating very high value IPO companies, I am in the information industry, I am making small companies into big companies, this is a different concept, we think IWe are engaged in the service industry, we are serving our investors, we are investing in the service companies. Let's explain today how these two services are done, first of all, from our experience, since 1993, the company has a very strong portfolio, once made a statistic, if you add TPG total, probably in the global Fortune 500 in the top twenty or thirty, there are some famous cases, such as China's Shenzhen Development Bank, Lenovo and other well-known enterprises. In the past, near the 20 investment experience, we have experienced a number of business model evolution, and finally summed up our three major ways, the first is the traditional mergers and acquisitions, the second is a transformational merger, traditional mergers and acquisitions is the traditional means of leveraged acquisitions, debt repayment, and finally the company sold for investors to obtain profits. Transformational mergers and acquisitions are a problem for the company itself and need to be reformed.　　Innovative investments are unconventional acquisitions, such as our collaboration with Lenovo to acquire IBM in the United States, which is a rare case. [Page] But we have always stressed that we as a company to be good at solving problems, such as the company was founded at the beginning of the acquisition of an American Airlines, to the bankruptcy of the airline's equity acquisition, after several years of efforts, the company restructured successfully, and finally a hundreds of millions of dollar listing, For investors to obtain a very high return, very early reflects our ability to solve problems. Later to Germany to acquire Grohe, which is the world's most famous sanitary ware brand, the problem is that the cost in Germany is too high, we moved its factories to China, Thailand, in the process caused many German union opposition, but we also bite the teeth dry, and finally the cost of the high, rated as problematic enterprises, Become a strong brand of sanitary ware in the world, now also has a big market in China. There are associations and so on, there is a memc, may be not very familiar with, unless you are doing photovoltaic solar energy, it is to do polysilicon, had to go bankrupt, his parent company does not want it, at a very low price to sell, we were about 1 dollars bought back, then after years of struggle, further investment, This project has earned us a billion of dollars in return.　　These are the result of solving the problem. So in solving the problem, it is very important to think of the reverse thinking, that is, when the others say it, you do it, for example, when the Asian financial crisis, we all invested in Korea's banks, we also succeeded. 2005 avian flu, the hotel occupancy rate in Hong Kong reached 0, when we acquired the headquarters in Singapore Hotel Group, reverse thinking is a very important culture of our company.　　After the financial turmoil of 2008, many people were afraid of debt, and at this time our company organized 3 companies that specialize in buying bonds. By the way, TPG's partners are usually more experienced people, such as our China sales department, and the other partner is Lenovo's CFO.We also have a team of business partners who recruit professionals from all over the world to invest in our company. Here's a Monday schedule, this is only in Asia, 11 to 12:30 to talk about China's project process, 12:30 to 13 to talk about Southeast Asia, then Japan, India, Australia, and then to the afternoon there are emerging market dynamic meeting, the evening 1 o'clock has Asian investment conference, why is the evening 1 o'clock? Since our headquarters is in San Francisco, it was 7 o ' hour. It adds all the forces of the world together. Our Company's investment committee is relatively small, we are not the same as the investment committee of Goldman Sachs, our investment committee is everyone can participate, you do not even participate in this project can come up to speak, of course, is not disorderly speech, if no point of waste of time is very easy to be perceived, but if you have a point of view , what do you think of this project, we will continue to summarize the decision-making mechanism of the Investment Committee, and even ask outside decision-makers to give us an analysis of our weaknesses.　　For example, we worry about a problem, some senior partners have a position to speak, he said promises, others do not dare to speak, his own team do not want to do the project, but his authority is very large, the following people dare not oppose, the risk came out. 2nd, we want to emphasize the global industry experience. For example, we invest in a bank in Korea, Shenzhen Development Bank, India's leasing finance companies and Taiwan Credit control, are financial institutions, it has different challenges, but it also has a common factor, how do we summarize the problems faced by different financial institutions, to form a global financial institutions investment experience, case? This is the most valuable asset to investors, which is another kind of self-discipline. That is, you cannot say that you invest in China, you say this is China, can not compare with India, can not compare with Taiwan, can not compare with the United States. Because the bank is the bank, it is common, but we in the process of comparison, not because our headquarters in the United States, decision-making by the Americans to do, this is not possible, to add industry experience, the industry experience is not only the experience of investment, more importantly for who service, we have to invest in our enterprises to add additional value, A lot of the money that is invested in wages gives people the feeling that as long as you are a dollar, we as investors are afraid as long as our money, good companies will continue to ask you to provide other services. For example, our Asia CEO, formerly GE's Asia president, has a lot of management experience in Asia, such as the President of our global Operations department, who used to be a CFO at Pepsi and then a partner in global operations.　　We have so many experts, for example, we do retail, there are a lot of people who do retail experience as our partners. This is how we evolved, in 1997, when we were basically not involved in the operations of the companies we invested in, we just recruited management, and then with a lot of information companies like McKinsey, we paid more than 87.5 million dollars a year, and now weTo pay them more than 1 billion dollars, we use a lot of third-party intermediary, and then we also set up their own operations team, and then with the search company to enrich the management of the investment company. And then put the portfolio of investments into executive meetings, every year we in addition to the investor meeting, there are company's executive meetings, senior executives do HR and HR communication, do information and do information exchange, we now directly hire a team, is the field operations team, is the company's problems, we directly send people into the company, Directly to his management, only in this way I think to add value to him.　　We have more than 45 operations experts, and the tools we use have increased a lot now, and that's how they solve the problem. So, from this point of view, we're called services, we can create a good profit, the premise is that we serve our company, to serve it, that is, to be honest, mutual respect, share responsibility, and can not say that the company is good, is our genius, found a good company, the company development is not good, We can not say that the company is stupid, give you money can not be developed. Any company has ups and downs, the best time, may come to the crisis, the most dangerous time, may be brewing the next step of development. We should be honest and fair, although we are all in pursuit of success, but we have to provide services, to strive for the company.　　The company's values summed up the core of our self-discipline, a person, a company to do their own, your self-discipline is done, do their own things are very important, is to have procedures.　　This is the main content of my speech today, and then quickly to see what we have done in Asia and China, and today is an opportunity to communicate with you. Our company formerly called the New Bridge, it is a joint venture with others, and then we acquired a minority stake in the return to TPG name, we from the first phase of the new bridge in 1994 to 2007 TPG Asia fifth, a total of 5 funds in Asia, the latest phase of nearly 4.2 billion dollars, There are about 3 more important funds that we can invest in Asia now, one for 4.2 billion dollars, one for the United States, and one for the 1.4 billion-dollar TPG Growth Fund I manage, which is also invested in Asia and, of course, in other regions.　　We have a very strong portfolio in Asia, our team is quite large, there are more than 60 investors in Asia, of which 10 are operated, and this team is still increasing, we have offices in Beijing, Shanghai. In China, we are the first to enter the Chinese market, one of the U.S.-funded PE companies, there are many more and more excellent enterprises, but we are relatively early. Our experience still has some different places, for example, to promote industry integration, we and Xinjiang's companies to do Canton Motor Services, currently has tens of billions of of sales revenue, we are more difficult to enter the industry to invest, such as the deep development of the bank, such as MIV, this is the largest private oil companies. For example, we also support overseas mergers and acquisitions,We are investing in a lot of ways.　　This is a brief introduction to our portfolio, but excludes all of our investments. In fact, we pe this industry, I personally think that the most important thing is self-discipline, self-discipline is the most important to the company's internal procedure management, the company's internal procedures, the most important thing is to have a good corporate culture, to determine that you are service-oriented, we have to serve the investors, but also to serve the investment companies,　　But we want to create a culture of integrity, respect, and equality, whether it is the first day into the company, or the old staff, as long as he put forward is the insights can be accepted, if only the company's boss, such a company must not do well, in such a high degree of self-discipline, we should be able to adapt to different regulatory environment. In the end, we are investors, not assets to verify the manager, we have to pursue long-term interests, we must join hands with other investors, but also in-depth into the company's management, and finally with a variety of departments, governments, institutions to form a real partnership. Only in this environment can we long be engaged in this industry.