When it comes to personal questions, he always evades answering.
Text丨Chinese businessman Taoluo Hu Kan Kan
At the critical moment when the "10 billion gambling contract" was approaching, Wang Jianlin finally waited for his "Mr. Key".
On December 12, Wanda Group officially released information that PAG and Dalian Wanda Commercial Management Group jointly announced the signing of a new investment agreement: PAG will work with other investors to reinvest in Zhuhai Wanda Commercial Management after redemption by Dalian Wanda Commercial Management Group at the expiration of its investment redemption period in 2021.
The biggest attraction of this cooperation is that the listing of Zhuhai Wanda Commercial Management and the related VAM risks that Wanda Group previously faced with great uncertainty have been officially dissolved.
According to Wanda's previous VAM agreement with investors, if Zhuhai Wanda Commercial Management cannot be successfully listed by the end of this year, Wanda Group will need to pay investors a total of more than 40 billion yuan in principal and interest, and the new agreement signed between PAG and Wanda does not set up a VAM for the listing of Zhuhai Wanda Commercial Management.
In other words, even if Zhuhai Wanda Commercial Management cannot be listed for a long time in the future, Wanda will not have to bear huge redemption pressure, and can focus on business development.
In the current environment that is still full of uncertainties, why and why did PAG change the direction of the tide on its own, and who is the key gentleman in charge of PAG, Shan Weijian?
【Burning eyebrows】
In February this year, Wang Jianlin, who had not appeared in the public eye for a long time, appeared at the White Horse Temple in Luoyang. These years have been unfavorable, and his body has been much thinner, and he is even thinner, even thinner, and even haggard.
A "gambling contract" put Wang Jianlin under too much pressure.
In 2021, Wanda will be fully light, and after withdrawing its A-share listing application, Zhuhai Wanda Commercial Management, the main body of the restructuring, began to compete for Hong Kong stocks and launched Pre-IPO financing.
According to the prospectus, Zhuhai Wanda Commercial Management's institutional investors at that time included 22 companies, including Zheng Yutong's family, Country Garden, CITIC Capital, Ant Technology, Tencent, PAG Investment Group, and Warburg Pincus.
These investors invested about RMB38 billion in Zhuhai Wanda Commercial Management in August 2021, of which PAG invested about US$2.8 billion (about 18 billion yuan), making it the largest external investor in Zhuhai Wanda Commercial Management before its listing.
In the above-mentioned investor agreement, there is not only a three-year profit guarantee for Wanda Commercial Management, but also a VAM agreement on the listing period: if Zhuhai Wanda Commercial Management fails to complete the listing by the end of 2023, Wanda Commercial Management is obliged to repurchase all or part of the shares from the above-mentioned investors at an annual internal rate of return of 8%.
This means that if Wanda Commercial Management fails to go public by the end of this year, Wanda will need to pay more than 40 billion yuan to investors.
At that time, Wang Jianlin, who signed the "sky-high gambling contract", must have never thought that the listing road of Zhuhai Wanda Commercial Management would be so difficult, and he would never have thought that the subsequent economic and financial market development would be so changeable.
Zhuhai Wanda Commercial Management's performance in the past few years is quite impressive: from 2020 to 2022, its realized revenue will be 17.196 billion yuan, 23.481 billion yuan, and 27.120 billion yuan respectively, with corresponding growth rates of 27.97%, 36.55%, and 15.50% respectively, and the corresponding net profit will be 1.112 billion yuan, 3.512 billion yuan, and 7.534 billion yuan.
But on the road to listing, Wanda can be regarded as unlucky.
In the past three years, Zhuhai Wanda Commercial Management has submitted a prospectus to the Hong Kong Stock Exchange four times, the most recent of which was on June 28 this year. The first three lapses were due to the fact that the approval for the issuance of H shares was not obtained from the CSRC.
According to the regulations of the Hong Kong Stock Exchange, the prospectus submitted by the company to be listed is valid for 6 months, which means that the latest prospectus submitted by Zhuhai Wanda Commercial Management is about to become invalid, and it is impossible for Wanda to land on the Hong Kong stock market within the agreed time of the "VAM".
What makes Wang Jianlin even more anxious is that the entire market environment in the past few years, including the stock price performance of property management listed companies, the market's expectations for such businesses, and the resulting impact on Wanda's financial capital operation, are also much more bad news than good news.
In order to have enough capital to survive the winter and break through, since the beginning of this year, Wang Jianlin has continued to lose weight and reduce his holdings of assets to realize, first intensively reducing the equity of Wanda Film, and some of its assets such as Wanda Plaza, financial licenses, and Infront Sports have also been put on the shelves in exchange for liquidity.
However, these funds are obviously not enough to cope with the performance pressure of the expiration of the huge "gambling contract". Wang Jianlin and Wanda can still be said to be burning eyebrows.
【Turning Crisis into Opportunity】
To the surprise of many people, the "White Horse Knight" will save Wanda from fire and water at a critical moment that is only half a month away from the fulfillment of the gambling contract.
According to the new agreement, Wanda's shareholding in Zhuhai Wanda Commercial Management will be reduced from more than 78% to 40%, and the total shareholding of several existing and new investors such as PAG will increase to 60%.
But for Wang Jianlin, being able to break through smoothly, ensure Wanda's smooth pass, and then sustainable development is the biggest victory.
The willingness to reduce the shareholding to 40% also shows Wang Jianlin's courage and pattern, especially his "willingness" to preserve the healthy development of Wanda, which he has devoted most of his life.
According to media reports, as early as half a month ago, Wanda began to negotiate with various investors about the plan to postpone the listing.
At that time, Wanda proposed to investors a plan to pay 30 billion yuan of equity repurchase money and corresponding interest in installments over four years.
On the condition that Wanda provide investors with an additional 20% equity interest in Zhuhai Wanda Commercial Management as collateral.
And judging from this agreement, Wang Jianlin finally gave up more, and then in exchange for -
Completely remove Wanda's worries that it may face risks again due to listing, and more support from other shareholders, and then give Wanda a more calm and unhurried development environment, to truly take a long-term view of long-term development.
As stated in the announcement——
"Wanda will work with PAG and other key shareholders to further optimize the company's corporate governance, maintain the stability of the management team, and jointly support the company's long-term development. ”
This also means that Wang Jianlin has once again succeeded in turning crises into opportunities, and Wanda will also be reborn and renewed in a stronger development base and a higher development dimension.
【Fate Binding】
Compared with Wanda's accident of successfully "breaking through" in this way, what surprises many people is that the "white knight" who rescued it will be PAG Investment.
However, if you look at PAG's business territory, especially its capital strength, this is also reasonable.
According to its official information, PAG is one of the largest independent alternative investment management groups in Asia and the only alternative investment firm headquartered in the Asia-Pacific region.
Unlike traditional asset management, alternative asset management has strong AUM and cash flow, strong barriers to entry, and higher fees. Investors are familiar with Blackstone, a leader in the world's alternative asset managers, and PAG is also known as "Asia's Little Blackstone" by the investment community.
With assets of US$50 billion, PAG's investment direction under Shan's leadership focuses on the joint development of three sectors: credit and markets, private equity and real estate.
Over the past 10 years, PAG has been active in the Chinese market, with a particular focus on real estate, and has achieved a second best track record in the real estate industry in terms of total return on private equity investments, with benchmark projects including:
In 2013, PAG acquired a 65% stake in the Shanghai Yueda 889 Plaza project.
In 2015, Vanke, together with PAG and Tishman Speyer, acquired Shui On Land's Shanghai Corporate Avenue Phase 3 for approximately RMB3.57 billion and raised a US$509 million equivalent loan from the market.
In November 2017, PAG and China Merchants Shekou jointly established Super Alliance Real Estate L.P., a real estate fund in the Cayman Islands with a total scale of 1.6 billion yuan, in a 4:1 ratio.
Subsequently, the real estate fund quickly acquired 100% of the shares of China Merchants Tower in Shanghai, 100% of the equity interest in China Merchants Plaza in Shanghai, and 91% of the equity interest in China Merchants Tower in the heart of Beijing's business district by way of an offshore transfer agreement, for a total consideration of approximately RMB5 billion.
Shan Weijian, the helmsman of PAG Investments, once explained his investment strategy and style in an interview, and one of the key tricks is buy-out, which is to obtain absolute control of the target, reorganize the company's management, and finally add value to the business, and then sell it for a profit.
"M&A investment targets are usually companies with a considerable history, which may not be doing well at this stage, or there is room for improvement, and we mainly create value by improving the operation of the enterprise after acquiring control. Shan Weijian said.
The most recent transaction was PAG's acquisition of a stake in Qixiang Group, a subsidiary of Cedar Industrial, for up to 8.35 billion yuan and the acquisition of control of the company.
PAG's investment in Wanda, especially the acquisition of a total of 60% of the shares, is obviously similar.
Shan Weijian once said that venture capital invests in the ability of management, and it may be worthless if the management is changed. "M&A investments are completely different. The primary way we create value is to improve its operations, strategies, and growth prospects. We have a post-investment management team, and they often act as a management consulting firm, helping management to develop strategies, improve financial management, and so on. ”
Shan Weijian said in an interview, "After we make a merger, we generally make sure that this management is the best management and the CEO is the best candidate. If you find such a team, you will give him a strong equity incentive, and completely bundle his interests with ours. ”
This also means that Shan Weijian may lead PAG to deeply participate in the development of Zhuhai Wanda Commercial Management and bring new development possibilities to Wanda.
Moreover, PAG and Wanda are also old acquaintances.
More than ten years ago, Dalian Wanda's first group of investors had the shadow of PAG.
According to media reports, in 2009, CICC led Wanda's lead in the year, led by CCB International, and among the other co-investors, there was a company called Beijing Dazhong Taiping, which is an investment company jointly established by Taihailian, the RMB fund management platform of PAG, and Zhang Dazhong, the founder of Dazhong Electric Appliances.
Shan Weijian and Wang Jianlin also have a deep friendship, and they also have a mutual friend - Ma Yun.
PAG's US$2.8 billion investment in Zhuhai Wanda is almost the largest private equity investment in a Chinese company in recent years, which shows its confidence in Wanda and the future of China's commercial management market.
Shan Weijian once said in the overture of "Money Game", "If there is no exit from the investment, the story is not over, and the outcome is uncertain." For investors, no matter how large, complex, or high-profile a deal is, closing a deal is only the beginning of the journey. Only when you completely exit yourself can you know the success or failure of the investment. ”
This investment in Wanda can also be said to be Shan Weijian's fate of himself and Wang Jianlin more closely bound.
【Mr. Key】
As the "Mr. Key" in the incident, Shan Weijian's background is also full of legends.
Born in Beijing in 1953, just three years after graduating from primary school, Shan Weijian boarded a green train full of intellectual youth, far from his hometown, and was sent to the Gobi Desert in Inner Mongolia to reclaim wasteland.
In the desolate Gobi Desert, where the lowest temperature often drops below minus 10 degrees, Shan Weijian grows wheat and repairs canals during the day, and Xi under a faint kerosene lamp in the middle of the night in the cold winter.
Fortunately, before coming to Gobi, Shan Weijian successfully assembled a semiconductor radio with the help of a friend, and with this radio, he had access to a wide range of information, including international news, and even taught himself English.
After six years of such days, Shan Weijian finally waited for the opportunity he had been waiting for to get out of the Gobi: he obtained the qualification of a worker, peasant and soldier college student, and obtained an admission place at the Beijing Institute of Foreign Trade (now the University of International Business and Economics).
In 1979, he became one of the first batch of international students to study in the United States after the founding of the People's Republic of China, and received an MBA from the University of San Francisco, a master's degree and a doctorate degree from the University of California, Berkeley.
After graduating with a Ph.D., Shan worked as an assistant professor at the Wharton School of the University of Pennsylvania for six years before moving from academia to the market, becoming a managing director at JPMorgan Chase in 1993.
Five years later, Shan Weijian joined Xinqiao Investment, a subsidiary of TPG (Texas Pacific) Investment Group, the world's leading alternative asset management company, and began his "open life" in the investment industry.
In 1999, when the East Asian financial crisis was raging, and the First Bank of Korea was in trouble, the value of the entire bank fell to less than 900 million US dollars, and the loss was as high as 1 billion US dollars. ”
That gave Mr. Shan confidence – he then negotiated with the South Korean government on behalf of TPG's subsidiary, Shimbashi Investment, and after 15 months of negotiation, Shimbashi bought a 51 percent stake in the bank for $500 million.
Shan Weijian also began to practice "buy-out" Xi since then.
After becoming the owner of Hanil Bank, Xinqiao comprehensively transformed it: first, establish a strict risk control system. According to Shan Weijian's analysis, the reason for its collapse was that it did not control risks well and had too many non-performing assets; second, it changed its strategy from focusing on corporate business to focusing on private business, creating new value growth points.
Within a year, Hanil Bank turned a profit, doubled its total assets, and successfully transformed into a retail bank.
Since then, Newbridge has transferred its equity to Standard Chartered Bank, which ultimately received a 5-fold return. Shan Weijian's record in reorganizing the First Bank of Korea was even written into the textbook by Harvard.
After returning to Chinese mainland in 2004, Shan Weijian tried to replicate Hanyi Bank's investment ideas, but at that time, China's banking industry was undergoing changes and foreign capital was not welcome to join. However, he still found an opportunity and completed a classic project: he led Xinqiao Investment to acquire a 17.89% stake in Shenzhen Development Bank for 1.235 billion yuan, becoming the first foreign investor to acquire and control of a listed commercial bank in China.
After becoming the controlling shareholder, Xinqiao immediately reorganized and controlled the board of directors of Shenzhen Development, and completed a series of process changes and personnel changes. Under its remodeling, the non-performing loan ratio of Shenzhen Development has increased from 11.41% at the end of 2004 to 0.63% in the first quarter of 2010, its net profit has increased from 300 million yuan to 6.3 billion yuan, and its asset scale has tripled.
Since then, Xinqiao has transferred its equity to Ping An Bank and has received more than 12 times the profit.
Shan Weijian, who once planted corn in the Gobi, has also won the transformation of "China's PE King".
Shan Weijian once said in his autobiography "Out of the Gobi", "I am ready at all times. If fate is bad and I don't have a chance, then there are no regrets. But if the opportunity comes and I'm not ready, it's my fault. So I'll never give up. ”
In 2010, Shan Weijian, who thought he was ready, made another brave move: he chose to leave TPG.
Twenty days after his departure, he and TPG jointly announced that the two parties would form an investment alliance known as PAG, and Shan Weijian would join with a sizable investment fund as chairman and CEO, and lead the establishment of an M&A investment fund with the entire Asian target market, focusing on all large-scale investments in the Asian M&A market.
Under Shan's leadership, PAG has integrated its three core strategic divisions (i.e., Credit & Markets, Private Equity and Real Estate) into a unified operating platform, and embarked on a new journey with China at its core, from Tencent Music to Yingde Gases, from Universal Studios Japan to Lotte Restaurant Group, from Zhenai to Lexin, and even Nai Xue's tea.
However, Shan Weijian, whose investment style seems to be "domineering", is extremely low-key.
Compared with other bigwigs who are active in front of the stage and are willing to preach, Shan Weijian is more willing to spend his time writing columns and paying close attention to the changes in the global economy.
In interviews, he always avoids answering personal questions.
It is particularly worth emphasizing that Shan Weijian and Wang Jianlin are the same age, and before this cooperation, two people who are nearly seventy years old are also struggling for the same way back:
In March 2022, PAG also submitted a statement to the Hong Kong Stock Exchange, planning to raise US$2 billion with a valuation of US$20 billion and sprint for an IPO, but due to the overall market is not optimistic, PAG has shelved its IPO plan and has not made any new moves.
It can be seen that Wanda, as one of its largest investment projects, has long been related to the fate of PAG. Under such interweaving, Shan Weijian saved not only Wang Jianlin, but also himself.
[References]
[1] "At the helm of 300 billion, the "king of private equity" Shan Weijian: China is still the place with the most investment opportunities", Zhenghe Island
[2] "Shan Weijian: An Investment Without an Exit, Uncertainty About Victory or Defeat," Barron's
[3] "The King of Private Equity in Asia, Hitting Hong Kong's Largest IPO This Year!Per Capita Salary of 3.8 Million Yuan", IPO Observation
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