Jun Lian Capital Li Jiaqing: When The Epidemic Period Is Now "Killing White Horse" Phenomenon, Investment Should Be More Selective.

The new crown has lasted for more than two months. Junlian capital has gained a new high of total foreign investment in the same period. The latest two projects are SF holdings, Shun Feng express and seabed fishing supply chain.

Li Jiaqing, general manager and chief investment officer of Junlian capital, gave an intuitive data comparison: "resources, teamwork, market position, and projects that have advantages in all three aspects, we must increase investment. The investment amount of some single projects is even 50% higher than before."

Looking back at the overall data of domestic venture capital market, the number of investment and financing transactions in China venture capital market decreased by 72.05% compared with the same period in February 2020, and the total volume of transactions dropped by 63% over the same period last year.

Why is Jun Lian capital overweight? Is it a new strategy adjustment made by Junjun?

The answer given by Li Jiaqing is negative. In March of this year he accepted the twenty-first Century economic report reporter's interview, said: "control the number of projects, increase the single project investment, select the head project and team, emphasize innovation, this is our fund raising strategy."

Behind the counter trend

At the CFO forum of Junlian capital in June 2019, Li Jiaqing put forward an early warning. "Some seemingly unexpected events actually have their inevitable results, while the interpretation of environmental changes shows high uncertainty."

The theme of this CFO forum is "internal control management". After three months, the theme of the CEOCLUB conference is "coping with changes and consolidating the foundation". Obviously no one foresaw the appearance of the new crowned black swan. The judgment of Jun Lian's uncertainty is based on the observation of the industrial chain and the common sense of the business cycle.

Jun Lian capital was founded in 2001, when the global Internet technology bubble had not yet bottomed out. Over the next 20 years, the Junlian capital team, adhering to the "rich and decent" culture, went through the financial crisis and witnessed several fluctuations in the domestic capital market.

Also based on the observation of the industry and the understanding of the cycle, Jun Lian capital made two major strategic adjustments in the fifth phase of the RMB fund raising in early 2019: first, the investment pace would slightly slow down; second, the investment amount of a single project will be raised. (see our February 2019 "Junlian capital RMB fund" "rite of passage")

Junlian's attempt to increase investment in single projects can be traced back to the 2015 Xinhai fund. Starting from this fund, the investment capacity of Jun Lian increased from 50 million -8000 yuan to 200 million -3 billion yuan in the past. At that time, the strategy of increasing single investment was still in the training phase, and only about 20% of the whole fund was carried out in this way.

That is to say, on the one hand, the era of gold everywhere in the PE/VC industry has passed, making investment more selective now. On the other hand, the Junlian capital team is also prepared for controlling the overall quantity and improving the strategy of single investment.

"Investment institutions need to think about whether the epidemic is reinforcing or overturning our past judgments. If it is strengthened, it should be more resolute in the current environment. A year later, the market clearly affirmed the insight of Junlian capital. Li Jiaqing thought that in today's market, "if you don't sell, you will have to play hard."

Love high threshold

Since the Spring Festival this year, the project has been divided into several categories: logistics supply chain represented by Shun Feng express, semiconductor and advanced manufacturing, enterprise informatization, intellectualization, cloud theme, and cross-border education and entertainment in recent years.

The common sense of the SF express and Shu Hai supply chain projects is the core competitiveness of three aspects: resources, team and market position.

The economic report combing in twenty-first Century found that this is related to another strategy and concern theme of Junlian capital in 2019, that is, to strengthen investment in technological innovation, strengthen investment in information services, cloud and big data, and strengthen investment in combination with industrial resources.

Li Jia Qing analysis: "we have improved the technological innovation of the project, the integration of industrial resources and the complexity of the operation of enterprises. Only by choosing such a project can we have more vitality."

Since 2019, the fifth phase RMB fund of Junlian capital has completed about 30% investment; 12 invested enterprises have landed in the capital market, and two other enterprises have already passed the IPO. The new fund raising work of the medical professional fund has been put on the agenda.

Asked about the impact of the new crown epidemic on the PE/VC industry, Li Jiaqing believes that the investment team that favors short and medium term opportunistic investment and poor financing capability will face challenges first. He also proposed the possibility of killing white horse in the special cycle: "the so-called" killing white horse "is that the weather has changed and the rules of the game have changed. In this case, it is still simple to follow the old experience. The strength of the code is very high, and the stakes are too concentrated. In this case, it is easy to cause trouble.

The theory of killing white horse is not only applicable to the PE/VC industry, but also to the startups. How to deal with Jun Lian capital? "Adhering to value judgment and long-term investment, in this process," exercising body "provides solid value services for the invested enterprises, and provides support in aspects of finance, financing, team building and market resources. Li Jiaqing said.

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