Investing In Jiang Mingming In The Flourishing Age: Doing Well In Internal Strength And Following The Trend And Creating "New Three Carriages"

"The first thing is to do well in internal strength. The second key point is to adjust and transform at the same time. Speaking of the continuing private equity investment downturn, Jiang Mingming, founder and founder of Shengshi investment, said in his keynote speech at the Ninth Annual Conference of China's innovation capital.

The theme of Jiang Mingming's speech is the practice of the parent fund to help the localization of responsible investment. He said that the practitioners in the PE/VC industry need to do well in the current market environment and introduce the latest progress in the management of PE two level market funds, the transformation of state-owned capital, the coordinated development of regional economy and responsible investment.

Jiang Mingming joined the equity investment industry in 1999, and witnessed three low tide industries: the first is the "Internet bubble" at the beginning of this century, the second is the financial crisis in 2008, and the third is the present.

Jiang Mingming. Data map

Build "new three carriages"

Since 2019, the three main directions of investing in Shengli are the second share fund, the transformation of state-owned capital and the bridge between the government, state assets and new economic companies.

According to the mature fund market in the United States, the size of the private equity investment industry 5%-10% will be precipitated to the PE two level market. By the end of September this year, China's equity investment industry has invested 5 trillion and 570 billion, which corresponds to the scale of two billion market.

Jiang Mingming believes that the entry of PE into the two tier market requires four major capabilities. First of all, the organization of second hand share funds should have the breadth and depth of investment. The second is to understand the industry. Third, we have the ability to judge and pricing underlying assets. The fourth is to have the ability to do transaction structure.

The second key direction of investing in Shengli is to support and expand state-owned capital under the background of mixed reform of state-owned enterprises. Jiang Mingming summed up the three core needs of state-owned enterprises, including transformation from asset management to capital management, transformation from investment and financing platform to industrial platform and increasing asset securitization ratio.

"This is the opportunity we can see in the next three to five years, so we also attach great importance to cooperation with various types of state-owned enterprises." Jiang Mingming said.

Based on past accumulation and building bridges with local governments, state assets and new economic companies, further serving the coordinated development of regional economy is the third key direction of investing in Shengli.

In the early years, many new economic companies rely on their own capital and rely on financing. At this stage, enterprises are increasingly aware of the need to make more integration with China's regional economic development and local governments. Under the circumstances that the proportion of the founders of the special enterprise is very low, it is more desirable to promote the development of different types of business through the combination of equity and debt.

"Most of China's funds are functional funds, such as the funds of the government and state-owned enterprises. Their demands are often not based on simple financial returns. According to the structure and attributes of such funds, we use the marketization mechanism to help them make market transformation. Jiang Mingming said.

Appeal for ESG to invest in one or two level market linkage

ESG investment is another focus of investment this year, which coincides with value investment, green investment and long-term investment.

According to public information, as of September 30th, there were 2600 management agencies in the global organization of responsible investment principles (hereinafter referred to as UNPRI), with a management scale of US $89 trillion. They all committed themselves to invest in accordance with the principles of ESG. China has a total of 31 UNPRI member institutions, including the investment in Shengli in May this year.

"Overall, ESG investment is still relatively small. First of all, we don't know enough about it. Secondly, how does this system integrate with China's reality? Third, what benefits can this system bring to investors? All these require us practitioners to further explore and practice. The regulatory authorities have also formulated many policies to promote the development of ESG investment. Jiang Mingming talked about the current ESG investment environment in China.

Jiang Mingming analyzed from the perspective of business practice that China's mother fund must be combined with the actual development of China's regional economy. "ESG investment is the same, reference to foreign standards, we have set up a set of ESG index system, but we emphasize that we should combine the practice of Chinese parent funds."

It is understood that the capital investment in Shengli investment management is mainly guided by local governments and state-owned assets. From the attributes of government funds, it emphasizes the balanced development of economic and social benefits. Through the ESG system, Shengli investment consciously co operates with GP to explore and practice.

In the specific operation, Shengshi investment has screened out more than 200 indicators suitable for China's investment. The index system should be set up from all aspects of collection, investment, management and retirement.

In his speech, Jiang Mingming also put forward a new expectation of ESG Investment: "we call for the one or two level market linkage, not only the linkage of investment, but also the interoperability of ESG standards, whether in the primary market investment or in the two level market exit, we should follow a set of value systems together."

He analyzed that China's capital market, the primary market and the two tier market are relatively independent. If many institutions can follow the ESG's investment standards, they can achieve a good exit to the two tier market after the investment is completed, which will really enhance the participation of the institutions from the mechanism.