Oceanpine Capital has transformed, and according to Oceanpine's internal statement, it is "upgraded".
A year and a half ago, I had a deep chat with Chen Liguang, CEO of Oceanpine Capital, at that time, although Oceanpine Capital had been established for less than five years, it was already a high-ranking private equity investment institution in the circle, with a management scale of more than 20 billion yuan and a DPI of more than 15. The overall IRR is over 34% – which is undoubtedly a very good result. What I remember most deeply is Chen Liguang's expectation of Oceanpine Capital: not to be a big white horse, but to become an awe-inspiring investment institution.
Behind the awe-inspiring is Chen Liguang's original intention of hoping that he can achieve capital for good. Therefore, after a lapse of 17 months, I was not surprised to learn that Oceanpine Capital had begun to transform, committed to industrial integration and restructuring, and increased the holding of listed companies.
But what is really surprising is that all this is based on Chen Liguang's resolute abandonment of the 2.5 billion yuan that has been raised. It is understood that even in the environment where it is extremely difficult to raise funds this year, Oceanpine Capital, relying on its own industrial resource advantages, has successively passed the selection of Anhui Province and Guangzhou City, and plans to set up a scale of 2 billion yuan and 500 million yuan respectively, most of which have reached the stage of signing cooperation agreements.
In other words, Oceanpine Capital pushed away the 2.5 billion at its fingertips and turned around and began to transform.
On the original intention
It is no secret in the industry that most investment institutions live on management fees. This is not difficult in the active market period, but in today's environment, institutions that rely on management fees can only be liquidated. Chen Liguang knows that if he doesn't want to become one of them, he can only return to his original intention and move forward prudently.
Chen Liguang, CEO and Managing Partner of Oceanpine Capital.
Oceanpine Capital's original intention is very simple: to create profits for LPs, truly empower the invested enterprises, help the development and upgrading of China's industries, and create value for the whole society. This is the primary reason why Haisong gave up the 2.5 billion yuan.
Sober people are always sensible. Raising money is only the beginning of "fundraising, investment, management and withdrawal", how to invest in high-quality projects after getting the money, and then manage the invested enterprises well, and withdraw at the most appropriate time, is also something that investment institutions need to think about. Chen Liguang did not evade, he said, "After raising funds, there may not be enough high-quality project investment, and at the same time, we have to complete the local ** return investment requirements, we think there will be a big challenge." ”
Having money can sometimes become a liability. Because quality projects are always scarce.
That's true. As the main channel for investment institutions to exit, IPO exit is no longer an easy task. According to CVCsource investment data, from January to November 2023, a total of 377 Chinese companies, including A-shares, Hong Kong stocks and U.S. stocks, successfully IPOed, with the number of IPOs falling by 1293%, and the amount of funds raised decreased by 39 percent year-on-year30%。
It is worth mentioning that the trend of a sharp decline in the number of IPOs is becoming more and more obvious. In October 2023, only 18 Chinese companies, including A-shares, Hong Kong stocks and U.S. stocks, successfully IPOed, with the number of IPOs falling by 51% year-on-year and the amount of funds raised falling by 61% year-on-year. If you only look at A-shares (including the Beijing Stock Exchange), there were only 11 IPOs in October, and the number of IPOs fell by 64% year-on-year52%, and the amount of funds raised decreased by 69 year-on-year75%。
Even after the IPO, it is common for the market value of the company to be cut in half or even **90%. Chen Liguang**The phenomenon of "it is difficult to IPO in A-shares, and it will continue to be difficult after IPO" will continue to exist for 3 or even 5 years. Although Hong Kong stocks and U.S. stocks are relatively easy to list, the liquidity and market value after the IPO are a bigger challenge.
More than a year ago, Chen Liguang showed an attitude that he could not agree with the behavior of some investment institutions to cast a wide net and tell stories to LPs in a desperate attempt to expand the scale of management, "Everyone has their own boundaries of ability, time and energy, no matter how superhuman you are." Equity investment is not gambling, even if it is an early-stage venture capital institution, it cannot simply bet on this track and a certain company. If I can't manage it, I'd rather not invest and not increase the scale of investment, which is the basic bottom line of being responsible for the LP behind the investment. I don't believe that the boss of an investment institution can still know his more than 500 portfolio companies and their executive teams, and it is even harder to talk about empowerment. ”
After Chen Liguang and the management team continued to review, after repeated internal discussions and extensive communication with the industry, the new strategic plan of Oceanpine Capital in the next few years was gradually summarized.
Systematically speaking, Oceanpine will continue to deepen the industry, focus more on the track, and do something and do nothing. Specifically, at present, the specific strategy of Oceanpine is to increase the layout of key tracks and industries, acquire and hold several outstanding companies that have been listed and will be listed, and intensively cultivate - first do a good job in the alpha of these enterprises, and then use this as a platform to acquire and integrate, become bigger and stronger;After that, wait for the adjustment of the economic environment, and once the beta comes, we will keep pace with the times and seize the opportunity of the changes of the times to follow the trend.
We don't do things that go against the current, which is too dangerous for an investment institution. "Sober people have always known how to judge the situation.
On doing something and not doing something
Looking back at the development of equity investment in China, the beginning of its vigorous development can be traced back to around 1995, and it reached its peak ten years later in 2005, when the Internet and new economy investment opportunities were emerging, and Internet investment boomed. Since around 2017, venture capital in the field of hard science and technology has been the mainstay, and the innovation of the Internet model in the past has also changed to the current entrepreneurship and investment based on scientific and technological innovation thirty years later.
There is an old Chinese saying: "Thirty years in Hedong, thirty years in Hexi." "In the past 30 years, China's economy has developed by leaps and bounds, and with the country's accession to the WTO and the wave of globalization, China has fully integrated into the tide of world economic development. In this process, China's GDP has increased by 43 times, and the per capita GDP has increased by 40 times, becoming the world's second largest economy.
Chen Liguang said that as an investor, he is fortunate to live in this great era and personally witness and participate in this grand historical change. At the same time, he is equally vigilant: after 30 years of glory, a new 30-year threshold has arrived. The next 30 years will certainly be one of great challenges and uncertainties.
Chen Liguang is an optimist, although he still expects that in less than five years, the number of active investment institutions in China will more than halve, and at the same time, the entire investment industry will face a new reshuffle;A group of high-valued enterprises, long-term huge losses, and enterprises with deep moats will also go out of business.
Chen Liguang is optimistic about his confidence in China's economy, his confidence in China's outstanding enterprises, and his confidence in Oceanpine Capital.
The abandonment of the two upcoming 2.5 billion fundraisings is precisely the embodiment of this self-confidence, which Chen Liguang said is "doing something and not doing something". As we all know, it is not difficult to do something, but it is difficult not to do something. In fact, Chen Liguang believes that "not doing something" should be the discipline that all investors must have.
In the case of Oceanpine Capital, "doing something" is manifested in giving up the investment model of peppering noodles in the past, focusing on key areas, digging deep and understanding thoroughly, and then finding a very small number of outstanding enterprises for deep cultivation and support. Chen Liguang said that the model of simply doing minority equity investment is difficult to develop and grow in the current market environment, and it is full of too many uncertainties. In the coming year, Oceanpine Capital plans to control two A-share listed companies and one or two pre-IPO companies. With this as a platform, we will continue to acquire, integrate, and broaden, deepen and penetrate the industry, and make the enterprise more refined and specialized.
It is understood that the new style of play of Oceanpine Capital has begun to set sail. In November 2023, with the approval of the China Securities Regulatory Commission, Oceanpine Capital and its affiliates regained control of Beidou Zhilian, a company that Chen Liguang had founded for more than 10 years (and later transferred), and appointed a new management team.
On November 23, 2023, the general meeting of shareholders of Beidou Zhilian was held in Beijing Huarui Building, officially completing the change of controlling shareholder.
The company is currently a leading enterprise in the key technology fields of intelligent vehicles such as intelligent driving and intelligent cockpit in China, with an annual turnover of more than 3 billion yuan, and is expected to achieve an annual revenue scale of 5 billion yuan or even 10 billion yuan in the next two to three years. Oceanpine's goal is to push the company to go public as soon as possible. At present, the industry changes brought about by smart cars and new energy vehicles have brought great opportunities to China's automotive industry, and Beidou Zhilian may become the leader of key components of China's smart cars in the future, and become Bosch in the era of smart cars.
In terms of fundraising, Chen Liguang also has his own plans. First of all, use your own funds, and bear the risks yourself, so as to give LPs who participate in the future greater confidence. "On the basis of making good use of our own funds first, we will raise funds for the market and specific LPs at the appropriate time. Focusing on special projects, mergers and acquisitions with a clear direction, rather than pure blind pools, so that LPs can see clearer projects and future exit channels, and achieve more stable and predictable returns. In an uncertain environment, create more relative certainty. Chen Liguang said.
On the spirit
Recently, Oceanpine Capital published an article discussing entrepreneurship, which showed in detail the longitudinal growth of market chaos when entrepreneurship is missing.
Chen Liguang believes that the most important reason why the equity investment market is mainly concentrated in China and the United States is that these two places have a series of outstanding entrepreneurs and can continue to create new groups of entrepreneurs. Whether it is successful start-ups, incubation, or future entrepreneurs and would-be entrepreneurs, they are constantly emerging.
Trace back to the source, investors as venture capitalists, investment is investment, investment is investment, investment in excellent entrepreneurs.
In the article "The Times Calls for Real Entrepreneurship", there is a paragraph worth pondering: entrepreneurship must first return to being a person itself, and the code of integrity, rules, and governance are the most basic. Second, innovate and forge ahead and create value. We must create value for society, industry, shareholders, employees and customers, and we must continue to innovate and forge ahead. Third, we should respect the market and capital. Investment institutions, capital and investors, whether large or small, must be respected.
If you have the heart, you can find that both the entrepreneurial spirit and Chen Liguang's pursuit of capital for good are all on the same path - Chen Liguang attaches great importance to value investment, because he knows that only when he truly achieves value investment can he be qualified to create an awe-inspiring investment institution.
It is difficult for a person to walk out of his own way without "spirit", and it is difficult for an organization to continue for a long time without "spirit".
The spirit may be elusive, but at least Haisong dares to give up the 2.5 billion.