The Paper's reporter Jiang Mengying
【Editor's Note】
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They have made a biography for the times, and we have made a biography for them.
At the end of this year, the transition period of the new asset management regulations is coming to an end, and the transformation of net worth has entered a sprint period.
A new era is coming - under the regulatory pattern constructed by the new regulations on asset management and new regulations on wealth management, bank wealth management actively adjusts its development concept and direction, and non-net-worth wealth management products accelerate their withdrawal.
According to a report released by China Everbright Bank in cooperation with the Boston Consulting Group (BCG), by the end of 2020, the size of China's asset management market reached 122 trillion yuan, an increase of nearly 10% compared with 111 trillion yuan in 2019; it is expected that by 2025, the annualized growth rate of China's asset management industry will remain at a level of about 12%, and finally stand on the total scale of 210 trillion yuan.
The huge space and rapid growth of China's asset management are of self-evident importance to financial institutions. Financial institutions are also working hard to seize the opportunity to seek transformation.
What have been experienced by institutions and ordinary practitioners as the epitome of the times, and how to meet this upheaval?
In mid-August, the surging news reporter had two in-depth conversations with Shi Lei and Qiao Jia, founders of Shanghai Attractor Information Technology Co., Ltd. (hereinafter referred to as Attractor), to record the entrepreneurial story of two "fixed income veterans" committed to building a financial technology company that meets the needs of the era of net worth under the great changes in the asset management industry.
Entrepreneurship is difficult - to solve the various problems on the road to entrepreneurship, there is no formula that can be applied, and there is no prescription that can be applied to all over the world. Shi Lei and Qiao Jia, the two "successful people" in the past fixed income circle, have deeply experienced in the 5 years of entrepreneurship that "no prescription can control the complex and uncertain situation, no prescription can lead the team out of the predicament, and no prescription can create a technology company." ”
As a fixed-income veteran, Qiao Jia concluded that in the past 5 years of entrepreneurship, stumbling and rejoicing, he finally made the attractor into a technology company. Even so, Qiao Jia's general feeling in the process of starting a business is still thanks to the times: "Before 2017, we are not needed." We came from the financial business, but we became a technology company, and eventually we had to return to the financial industry to solve the problems of the financial business, especially the problems of the asset management industry. ”
From star analyst to fintech company founder
Shi Lei was once a prominent figure in the "fixed income circle".
Shiller
In 1999, Shi Lei was admitted to the Department of Physics of Peking University from renmin university affiliated high school. When he was an undergraduate, Shi Lei also took courses at the Center for Chinese Economic Research of Peking University, and then obtained a master's degree in finance from the China Economic Research Center of Peking University.
After graduation, Shi Lei successfully entered the Global Financial Market Department of the Bank of China Head Office, also known as the "Ball Department", and was responsible for the research of the foreign exchange market, China's macro-economy and bond market. Seven years later, Shi Lei joined the fixed income department of Ping An Securities, and has been working on the bond market ever since, and has also become a columnist for Caixin Weekly and Reuters, and a large number of analytical articles he has written have been widely circulated in the circle. During this period, Shi Lei also participated in the consulting work of the State Council's Financial Crisis Emergency Response Team from 2008 to 2009, and was hired as a special expert by the China Development Bank; and won the first place in China's macroeconomic forecast in the "Vision Cup" of Securities Market Weekly in 2009 and 2010.
Due to the Delta epidemic, Shi Lei was interviewed by the surging news through video in his Hangzhou office.
"My career has been all about catching up with the call of the times – from 2009 to 2015, until I resigned in 2016, I was in the fixed income division of Ping An Securities. This department is both bond issuance and investment business, and I am responsible for investment research. So it's actually a closed-loop chain of production, from producing bonds to investing bonds. ”
Shi Lei recalled the Chinese credit bond market at that time, because it had just begun, there was no credit risk, and there was no default. As long as liquidity can be maintained, the performance of bonds can cross the bulls and bears, which is a perfect arbitrage business. Looking back now, Shi Lei summed it up as a dividend of the times.
The asset management industry is the brightest star of China's financial industry during this period. The scale expansion rate of the asset management industry has been maintained at more than 50% for many years, and various institutions such as trust, bank wealth management, insurance asset management, securities company asset management, fund, and private equity have successively appeared, attacking the city and pulling down the wall, and the scale is king.
After 2016, bonds began to default. On June 7, 2016, northeast special steel group, a large state-owned enterprise, announced a default on a matured bond, which was a landmark event of the year.
Although most fixed income products are still rigidly paid, Shi Lei found that as an asset manager, it is becoming more and more difficult to face the rigid redemption needs of customers. Because the investment side is volatile, the credit risk is also increasing. That year was very painful, and the changes in the situation forced Shi Lei to think about whether he could still stay in the comfort zone as in the past, and he was already the general manager and research director of the fixed income division of Ping An Securities.
Shi Lei in the Hangzhou office of the attractor
Shi Lei soberly realized that the period of brutal growth of the asset management industry has come to an end, the channel business has declined, the industry is about to begin to upgrade and reconstruct, from shadow banking to asset management, the entire asset management industry will be reshaped into wealth management services, asset allocation, investment entrustment management, boutique asset management and ETFs and other levels.
Attractor Information Technology Co., Ltd., of which Shi Lei is the chairman, was incorporated in Shanghai on August 26, 2016, and at the same time their Hangzhou office was opened for operation. As the core of the team, Shi Lei is responsible for research and development, sales, and customer service, so he does not have much time in Shanghai every week.
In 2017, the Guiding Opinions on Regulating the Asset Management Business of Financial Institutions (Draft for Comment) (hereinafter referred to as the New Asset Management Rules) was published and officially released the following year. The China Banking Regulatory Commission, the Insurance Regulatory Commission and the China Securities Regulatory Commission have successively issued stricter regulatory guidance for the asset management industry, mainly restricting regulatory arbitrage and excessive leverage, and the asset management industry is returning to the core of asset management.
The big industry pain point is business opportunities
"To record the Himalayas, I only slept for three hours last night."
One afternoon in mid-August, in the office of Taikoo Hui on Nanjing West Road in Shanghai, Qiao Jia was still holding coffee in her hand. After graduating from the University of Melbourne, Joka worked for Australia's Basis Capital, where she experienced the subprime mortgage crisis. After returning to China in 2009, he broke into china's bond market alone.
Joka
"I did [bond private placement] in 2009, and there should be no one in the fixed income circle who is earlier than me that I can hear about now." At that time, the leverage of the bond market was particularly high, and there was no concept of private equity funds, and sunshine private equity was a later thing. ”
After the subprime mortgage crisis, there are more "stories" in China's bond market. After experiencing the "debt disaster" in 2010 and the "money shortage" in 2013, Qiao Jia gradually became famous in the fixed income circle.
As the Fed launched its second round of quantitative easing (QE), the yield on the 10-year Treasury bond of China rose sharply from 3.23% to 4% from September to November 2010, rising nearly 80BP in just two months, breaking the calm that China's bond market has always been. In 2013, the bond market "cracked down on black", requiring all bond accounts of the same financial legal person not to be directly traded and not allowed to pass bonds by third parties, and liquidity was tight; the central bank insisted on not releasing water and tight open market operations, resulting in a rare "money shortage".
Shi Lei believes that most institutions in this period are flaunting their own asset management, in fact, it is more of a "shadow banking" model, absorbing funds in various forms, and then lending out in various structures, mainly interest rate income. Market environment and regulatory changes are pushing the industry into the next era, if you want to adapt to the new environment, the asset management model will be reshaped, the existing asset management industry pattern may be reconstructed.
After several rounds of turmoil, it was not only Shi Lei who found that the times were changing.
At some dinner party in Beijing, Qiao Jia became acquainted with Shi Lei and another founder, Gu Li, who was the leader of risk control in charge of Zhongrong Trust at the time. All three come from pain points in three different segments: fixed income, private equity and trust. Three "pain points" came together, sat together and ate two meals together and found that they were all facing the same social pain point - they could not do wealth management by themselves. Three financial industry "veterans" hit it off – such a big pain point is business opportunities.
Looking back on the original intention of starting a business, Qiao Jia still believes that solving these problems will definitely make money.
"We're solving the problem of an era, which is very difficult, but first of all, after 5 years, I think we are on the right track, and secondly, we have solved the problem more than halfway."
Qiao Jia runs a company in Hangzhou
When Shi Lei and his partners chose to start a business, China's trillion-dollar asset management industry was undergoing a painful transformation. As veterans of the fixed income and asset management industries, they concluded that the core pain point of the asset management industry is how to provide net worth asset management products with a better customer experience, and the solution is: risk allocation. Therefore, Shi Lei, Qiao Jia and Gu Li's entrepreneurial idea is to be a company that supports a comprehensive risk allocation solution. Investors they found Mao Zhenhua, chairman of China Chengxin Group, a junior who was very willing to promote young people in their eyes.
"Mao was always the elder brother, and he said, 'This is right.'" China needs experts who fix income, and these few of you are doing serious things, and the rest depends on whether the times will give you a chance. ”
Qiao Jia has her own set of business experience: the most important thing for startups is that in addition to maintaining cash flow to survive, don't take too many detours, and strategy is the most important.
"I have three principles for doing business, first, the needs of the people, second, the state allows it, and third, I do it myself more efficiently than others. If all three can be met at the same time, it is a good business, and if it is not satisfied, it is problematic. ”
The battle between the two major tracks of asset management and wealth management
The Attractor is a concept in physics that refers to the quasi-steady state in complex systems.
Shi Lei explains the name this way: In investing, assuming that value investment is an attractor, it may return to some value or some relative value in the future, but it is impossible to predict which day it will return to this value. Therefore, it is a possibility of a high probability of the future, a quasi-steady state, and we only need to wait in this quasi-steady state. Figuratively speaking, it can be compared to a hunter waiting for the rabbit, not chasing the prey, because chasing the prey is not catching up; but need to observe the attractor, wait for the tree next to the attractor to "wait for the rabbit", wait until the prey falls into this attractor state.
Taking this name reflects Shi Lei's years of thinking about the financial industry and investment. What are financial markets? Is the market like the textbook says? Will it eventually return to value? What is value? Shi Lei found that in investment, time is a devil, and the variable of time cannot be ignored. However, according to traditional investment theory, it is impossible to explain time.
Shi Lei found the answer to the problem in the "system theory" and "contradiction theory" of sociologists and social philosophers—it can explain the spatial-temporal distribution in the market.
Shi Lei highly admired the theory of the philosopher Jin Guantao. Jin Guantao argues in The Philosophy of the Whole that the laws of things should be grasped as a whole; The End of Certainty proposes that certainty is lost when in a complex system. Therefore, investing requires prediction, but it is not necessary to predict specific moments - in a complex system, the future state is not evenly distributed, although it is full of chaos, and this chaos is unpredictable, but it will form some steady state called "attractors".
Shi Lei recommended Jin Guantao's book to Qiao Jia. After Repeated study by Qiao Jia, the two people's concept of entrepreneurship has been further deepened and sublimated - first of all, we must find the main contradiction of the system, if the main contradiction is moving forward, it means that the system may undergo qualitative changes, "just like the 'critical state' in physics." The critical state is the most suitable point for trading, "the lowest cost, the highest return, and the greatest elasticity".
Back to the asset management industry, in the years of barbaric growth in the asset management industry, due to factors such as the general instability of the capital end, the short-term phenomenon of product performance is serious. At the same time, the asset management industry relies on the "pool of funds - asset pool" model to manage risks, and most investors and channels can only use the credit or past performance of asset managers to make judgments. However, as the whole industry is just broken, when investors really begin to take risks, the public financial behavior will change dramatically, and the entire Chinese asset management and wealth management industry will also evolve. Risk redistribution will change the pattern of the asset management and wealth management industry, will be transformed into forward-looking risk management services, into customer, wealth management, asset management of the entire industry chain on the information interaction, in the past the entire industry chain is product-centric, the future will be customer service as the core, information interaction will become the key.
The original intention of the attractor is to break down the barriers between the asset management industry and the wealth management industry - between the two industries and within the industry, the discourse system has been different for a long time, but in the period of net worth, it is necessary to communicate.
Shi Lei explained the positioning of the attractor in this way: In the past, in the state of allowing rigid redemption, the asset management industry and the wealth management industry were separated, and now the full market competition and net worth management have become, and these two industries will actually become a track, which can be called a big wealth track.
"How these two industries can be integrated is still quite complicated, and I think attractors will play a very important role in this process." Shi Lei said.
By the end of this year, all asset management products must be transformed into net worth products; attractors have also celebrated their 5th anniversary – these five years have witnessed the whole process of China's new asset management regulations from surface to landing, and then to the completion of all rectification.
Shi Lei said, "Although there is a two-year delay in the final implementation of the [new asset management regulations], no matter what, we can see that the determination to implement the policy is very strong; now we are equivalent to facing the tide of the new asset management regulations and helping the wealth management subsidiaries of the asset management bank to transform." ”
Shi Lei and Qiao Jia at the company's 5th anniversary celebration
"From the financial industry, it became a technology company"
The attractor has expanded from a team of a dozen people to more than 40 people, but like many other startups, the biggest problem for the attractor is how to make a profit and find a unique profit model.
"We came from the financial industry and became a technology company. Because to solve the problems of the financial industry, you need to industrialize the asset management industry, industrialization needs standard parts, when everyone is put together, you can become a stable machine, and then serve the wealth side. ”
Both Shi Lei and Qiao Jia believe that the development path of the attractor is very similar to that of BlackRock. Shi Lei commented that BlackRock is now a technology company.
Black Rock is the world's largest asset manager. As of the end of June this year, BlackRock had approximately $9.5 trillion in assets under management, including equities, fixed income, alternative investments, multi-assets, cash management and advisory services. The "foundation" underpinning its trillion-dollar assets under management is the Aladdin Platform, an investment risk management system it has developed and developed in-house since 2000. Some commentators believe that Aladdin is the main reason why BlackRock is sought after by financial institutions in the United States and even around the world. The system connects investors to the market and is a platform-based system that integrates risk analysis, portfolio management, trading and operational tools, covering the cyclical investment process of all asset classes, ensuring that the portfolio holds the right assets and measuring the risk of various financial products.
Shi Lei and his partners are also increasingly discovering the intrinsic link between "finance" and "technology." On the one hand, the data scale of the asset management industry has shown a huge growth trend year by year, bringing data screening and identification problems for asset management professionals. On the other hand, bond defaults have risen sharply in recent years, and "asset shortages" and "capital shortages" coexist. Relying on traditional analysis methods, it is difficult to effectively assess the value of bond assets. Such an industrial basic disk determines that its demand for professional management efficiency is finally in a state of continuous rise.
Jogart also made another, more graphic analogy: Attractors are more like IBM than consulting firms like McKinsey.
"IBM originally sold machines and hardware, but found that if it didn't provide solutions, it couldn't sell machines. We sell the system by providing solutions to B-side customers. Our transformation from a financial company to a financial technology company is 10,000 times more difficult than everyone thinks, you can't imagine how difficult it is, especially difficult, but this thing we can say is a successful transformation. ”
In the third year, attracters won an order from the private banking department of a leading joint-stock bank, and during the cooperation period, attractors have built two phases of systems for the bank, through the procurement and deployment of the head office, empowering front-line investment advisors and wealth managers throughout the jurisdiction, and providing full-process solutions for wealth management.
Shi Lei introduced that this solution of the attractor has three characteristics: first, the investment structure of the past trust-based and bank wealth management supplemented by it is converted into a portfolio, and the volatility is reduced through diversified allocation; secondly, it is accompanied by post-investment, and in the whole investment process, it helps customers to monitor whether the invested products are developing as expected, help customers analyze and diagnose in a timely manner; the third is asset allocation, providing a set of standards that can meet diversified needs and improve the efficiency of the industry. This is also the most core technical difficulty that the attractor overcomes.
Qiao Jia said frankly: "We start from the business, we can even make an infrastructure system, which we are very proud of, but we have not yet begun to make a profit, the current infrastructure supporting the development of the industry, this support has not yet reached the point where it can meet the development of our profit model, so we have to further explore." ”
From the perspective of industry competition needs, with the improvement of the opening up of the domestic securities asset management market to the outside world, a large number of foreign asset management institutions have poured into China. At present, 9 of the world's top 10 asset management companies have settled in China, including BlackRock and Bridgewater. These institutions with more advanced technology are bound to bring more fierce competition to the domestic market, and Chinese-funded institutions need to use asset management technology more urgently to enhance their investment research and risk control capabilities.
Attract the team of the child
On August 26, the 5th anniversary of the 5th anniversary of the company's founding.
The era of the rise of intellectual power in the financial industry has arrived
After years of deep work in the industry, Shi Lei borrowed the French scholar Foucault to explain the transformation of the net worth of the whole industry - "the rise of financial knowledge and the rise of knowledge power": the past era of just exchange was actually due to the decentralization of administrative power and shareholder rights, and in the era of net worth, information and management were dynamic, which led to the rise of knowledge power.
This road of transformation is bound to be arduous, and there is no ready-made model to learn from abroad, because no market has experienced the era of just exchange. In Shi Lei's view, the situations of Japan and Taiwan may be relatively similar.
During the period when Taiwan's economy was the fastest, there was also a relatively rough period of wealth management, and some of the playing styles of some banks on the mainland were learned from Taiwan, which were more suitable for the era of just exchange, and were relatively simple, fast, and effective in that period. However, in the era of net worth, if you look at Japan, they were achieved through the bursting of bubbles, and interest rates are still zero.
The transition period of the new asset management regulations is about to expire, and the attractor has adjusted its development strategy in the past three months.
"We just started the C-end business in Himalayas, which we have never done before."
Summing up the 5 years of entrepreneurial road, Qiao Jia believes that the first two years of attracting people are more theoretical, and now they have found their own base, that is, cooperation with Large Licensed Financial Institutions in China; the next stage should take root in the people to do the C-end.
"When there were only 10 to 20 people on the team, there was nothing to deal with, and now there are more than 40 people, which can be divided into to B business and to C business." Qiao Jia said that the more choices there are, the more important the strategy. He said that after the attractor has a system, it can industrialize to produce meaningful information, and then touch this information to the C-end through various ways, and may distribute the information like vibrato.
"The attractor should ultimately be the 'vibrato' in the financial and economic fields," Qiao Jia said, adding that the algorithm part is done, and the next step is how to interact with customers, make customers like, and generate and meet personalized needs.
As a fixed-income veteran, Qiao Jia finally concluded, "Stumbling and happy, finally becoming a technology company." I had never thought about retirement before, and if it was done, I felt like it was almost over, and I probably didn't want to do the next thing. ”
Editor-in-Charge: Zheng Jingxin
Proofreader: Luan Meng