China Rock Investment Dan Shiqiang: Mother Fund Investment Advanced Refinement Era, Continue To Create A Diversified PSD Investment Mode.

"The development of China's parent fund industry has gone through the investment from" platter "investment to PSD strategy investment. Recently, Dan Shiqiang, an investment management partner of China rock, said in an interview with the twenty-first Century economic report.

It is understood that China rock investment was established in 2011, is the asset management section of Heng Tian wealth. Under the banner of China rock investment, there are multi - sector businesses such as bond investment, securities investment, equity investment, real estate investment and global investment. Among them, the equity fund of China rock belonging to equity investment is expanding management scale in recent years.

In the case of Shan Shi Qiang, the parent fund investment is the most reasonable way to obtain higher returns in the case of risk diversification. Therefore, in the European and American markets, the parent fund has become the first choice for high net worth customers to participate in equity investments in the primary market.

In the Chinese market, the parent fund industry has also experienced a process from scratch. At present, the total scale of management has exceeded two trillion yuan. But most of them are government guided funds, national industrial support funds and other non market operation parent funds.

For the market-based parent fund, the extensive development from the "platter style" investment to the intensive cultivation of the PSD strategy is a process of continuous optimization and iteration. The parent fund of China rock group is also developing in this direction, and summarizes its own methodology.

Eliminating the false and the true of PSD strategy

Dan Shiqiang said that the marketization of the parent fund is increasingly becoming an important part of the equity investment system in the multi-level capital market, and it is also one of the backbone forces to help enterprises grow. At present, many marketization mother funds have introduced the mature operation experience of foreign parent funds into the PSD investment strategy.

The so-called PSD, namely the new fund (Primary), the second-hand share (Secondary) and the direct investment (Direct Investment). P strategy is a continuation of traditional parent fund investment business, screening high-quality head institutions to build portfolios.

The S strategy focuses on the trading opportunities of stock market fund shares, commonly known as second-hand share investments. It usually takes seven to nine years for a fund to end from investment to the end of its existence. The first few years are the low or even negative return period of investment return, but after a certain stage, the return on investment has gradually increased. The investment of second hand share can exceed the waiting period of the preceding four or five years, so that investors can understand the development of the underlying assets better, enhance the clarity of the investment portfolio and the liquidity of the fund.

Dan Shiqiang said that in the US market, the share of second-hand shares has accounted for more than 1/4 of the total annual turnover. In the Chinese market, second-hand share trading is still in the market groping period, and more and more people are trying. For example, in December 10, 2019, the Shenzhen Venture Capital S fund with a target size of 10 billion yuan was set up.

D strategy can not be simply interpreted as direct investment, but tracking and supplementary investment. The parent fund has covered a lot of underlying assets through the P strategy and the S strategy. For the high-quality projects that run out, the parent fund can carry out trailing and additional investment so as to increase the rate of return on investment.

"It is not easy to catch quality projects through P strategy and S strategy. If we do not make additional investment at this time, it will be a waste of investment opportunities. The implementation of D strategy is an excellent opportunity for investors to create excess returns. " Dan Shiqiang said. For investment institutions, the amount of capital needed to grow to the later stage will be larger and larger, and the strategic shareholders who are more useful to the enterprises will also need to be introduced.

The PSD strategy helps the parent fund increase the liquidity and yield of the investment, but there is also no lack of funds in the market to replace the concept with the pseudo PSD mode.

Dan Shiqiang told reporters that, for example, some parent funds did not make direct investment on the basis of sub funds already covering the source of the project. Instead, they built their own teams to make independent investments, which did not give full play to the advantages of the parent fund, reflecting the characteristics of the D strategy "tracking" and "adding". In addition, some parent funds are phased investment in the subscription of sub funds, and the first phase of the investment is made with the first product, and the second phase of the two product is funded. At this point, the contribution of product No. two can not be defined as S share, in fact, it is only a batch of subscriptions of the same fund.

Favored investment institutions and industrial empowerment institutions.

At present, the proportion of PSD three business of middle rock equity fund is about 5:3:2. What principles do companies pursue in implementing P strategy?

Dan Shiqiang said that the equity fund of Zhong Yan would not be too concerned about the opportunity of pure business model innovation. Companies are more willing to return to the nature of equity investment and invest in industries that can effectively increase productivity, production efficiency and meet social needs, such as hard technology, health care, semiconductor, consumer technology and so on.

In terms of the investment cycle, the parent fund of China rock group pays more attention to the projects between A-C wheels, and will be very cautious about the D round and subsequent maturity projects. "Now that the dividend period of the system has arrived, corporate finance can go to NASDAQ or Ke Chuang board after the C round. If it is still in the primary market, financing is against the objective law." He said.

In the above mentioned investment fields and the scope of the cycle, the parent rock fund of the middle rock group selects suitable sub funds for investment and direct investment cooperation. In the selection of managers, Dan Shiqiang said, first of all, the quantitative assessment of fund managers is a prerequisite element, including the historical yield of funds, the specific index of profitability and other specific indicators.

In addition to the quantitative examination, the parent fund of Zhong Yan's equity fund is particularly important for the two types of institutions. One is the investment organization of the craftsman. Its characteristic is that it has strong professional ability and industrial resources in some subdivision areas, and has a deep craftsman spirit. By means of their own unique cognition and circle resources, this kind of organization can "find, see accurately, invest in and help well" for potential start-ups. As a result, the equity fund of China rock has invested in the capital of China, which has focused in the field of health care, and has invested in advanced manufacturing.

On the other hand, the team is also optimistic about the industry oriented investment institutions, such as Shun's capital backed by Xiaomi, backed by the Yunfeng fund of Ali. Dan Shiqiang explained that in the European and American markets, CVC is a very active mainstream investment institution, such as Intel investment, and so on, based on the parent company's ecological chain and upstream and downstream resources of the industry. But in the Chinese market, there are not many companies that are really dominant in the industry, who can formulate rules of the game and then do CVC.

"Some companies do not show enough strength in their industry to start investing in CVC, which is not what we are looking for. We are more inclined to cooperate with CVC, a leader in the industry, who can really empower the industry. Dan Shiqiang said.

Set up an independent post team to ensure the implementation of S and D strategy.

"When the market temperature drops suddenly and the fund-raising fund is no longer easy, the long-term stable investor of China rock equity parent fund is more easily recognized by everyone." Dan Shiqiang talked about the advantages of Zhong Yan's equity fund.

After investing in sub funds, the middle rock equity parent fund also set up an independent team to make the post investment management business heavier. It is understood that the proportion of staff before and after the investment reached 1.5:1.

In this regard, Shan Shi Qiang explained that the short cycle of financial products, usually in the post investment aspect does not need to spend too much thinking. But for long term products such as private equity funds, post investment management will be very important and complex.

From an investment point of view, for example, when a 500 million scale parent fund is established, the investment period in the preceding two or three years needs investment management. After investing in sub funds, the implementation of S strategy and D strategy belongs to post investment management. After two or three years of development, the underlying assets are able to meet the needs of the fund after making profitable profits. They can be traded through the share transfer of the secondary shares, thereby increasing the liquidity of the fund. When investment finds good enough underlying assets, additional investments can also be made to obtain excess returns.

From the perspective of product risk monitoring, it is necessary to monitor its operation and risk management in real time in the running period of seven to nine years. In addition, from the perspective of information disclosure, the parent fund also needs to communicate with customers in real time. These are all places where the management team needs to invest a lot of energy.

For the new year's development plan, Shan Shi Qiang said, first of all, the team investment strategy and direction mentioned above will not change at all. Second, the parent fund will continue to work with more outstanding fund managers to maintain a reasonable growth in the size of the parent fund management.

"Due to financial regulatory policies, market sentiment and other factors, the supply of funds in 2020 may still be less than adequate. But in the process of the old and new economic iteration, high-quality start-ups are still expanding in scale. In this case, it is the window stage of the primary market layout, plus the favorable external factors such as the bonus launched by the science and technology board. We hope to continuously increase the layout of equity investment. He said.