For fi­nancier, China was clear win­ner

China Daily (Canada) - - PEOPLE -

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.”

DAILY PRO­VIDED TO CHINA

Wang Chaoy­ong, founder of Chi­naEquity Group, says de­spite China’s eco­nomic slow­down, his trust in in­vest­ing in the mar­ket is undi­min­ished.

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