For financier, China was clear winner
Founder of ChinaEquity group put his faith in nation’s entrepreneurs, and never looked back
1993 to 1998 and worked for China Development Bank as a senior banker for two years. After seven years working in China he was confident about his knowledge of the market.
However, going it alone to start ChinaEquity and build a new brand rather than relying on foreign investment companies or state-owned capital meant success would be hardearned.
“At the time, venture capital was not well understood in China,” he says, adding that the first few rounds of fundraising were done overseas.
“But the good thing is that after overcoming difficulties early on, we were able to remain independent and to build our own venture capital and private equity brand.
ChinaEquity first focused on helping Chinese returnees to start businesses, providing investment and related valueadded services, he says:
“There was this missionary zeal we had of helping overseas returnees link up with capital and realize their entrepreneurial dreams.”
The company has now expanded its range to cover entrepreneurs in China, no matter what their provenance. Half of ChinaEquity’s capital is invested in domestic entrepreneurs and businesses.
The country’s rapid economic growth has given the company great opportunities, and the development of the internet sector during the company’s lifetime has been notable, he says.
“We have witnessed, taken part in and promoted the development of the internet industry and other emerging industries. In the late 1990s there were just a few hundred thousand internet users in China, and now there are 700 million. That provides great
growth opportunities for our investment projects and companies.”
Wang says his strategy is always to invest in emerging industries and entrepreneurs but to be flexible enough to adapt to changes in the market.
“For example, 15 years ago all of our venture capital would have been invested in the technology, media, telecommunications and the internet sector,” he says. “Ten years ago 70 percent was in the internet sector, and five years ago that was down to 50 percent. Now it’s 30 percent, the rest going into the healthcare industry and culture industry, which includes sports and education.”
Wang says that despite China’s economic slowdown, his trust in investing in the market is undiminished, and he continues to see great potential.
His company now only invests in nine areas, he says: high-technology, advanced manufacturing, high-quality service and consumption, the cultural industry, the healthcare industry, the environmental industry, new energy, new materials and new business models.
China’s restructuring and transformation in traditional industries will present more possibilities for investors, he says:
“In the emerging industries in which we invested, the companies’ growth has been double or triple that of China’s GDP. The economic slowdown is not a problem, but it is a test of our insights and our ability to spot the opportunities in the traditional sectors.”
Wang says that in the past 17 years ChinaEquity has invested in more than 100 companies, the most successful being Baidu Inc. Now it’s getting the best returns in sectors such as healthcare.
I thought I should make myself useful and help them with their startups, help them with fundraising and provide the investment services.”
Wang Chaoyong, founder of ChinaEquity Group, says despite China’s economic slowdown, his trust in investing in the market is undiminished.