FGA500 Current Person Haisong Capital/Executive Director Chen Siyu
Since 2005, when China's new economy Internet has carried out business model innovation, the United States has vigorously developed a series of basic technologies that serve the Internet economy, such as chips, enterprise services, cloud computing, artificial intelligence, network security big data, new energy and new materials, and biomedicine.
Since 2017, China has entered the new normal of the economy, the development of the traditional real economy has encountered obstacles, the mobile Internet economy dominated by pure model innovation is difficult to further expand and strengthen, the information age has begun to transition into the intelligent era, the development trend of the Internet to hard technology has become a bright card, and the golden age of venture capital investment in the hard technology industry has come.
In December 2018, Premier Li Keqiang presided over the first plenary meeting of the Science and Technology Leading Group, proposing that innovation is related to the future and destiny of the country, and hard science and technology has risen to a national will strategy, focusing on hard science and technology research. In addition to policy support, capital also uses real money and silver to benefit hard technology. Since the opening of the Science and Technology Innovation Board, as of July 2021, more than 300 enterprises have logged on the Science and Technology Innovation Board, with a total market value of 5.38 trillion yuan and raised 385.8 billion yuan.
Chen Siyu, the special guest of this issue of FGA CHAT, is a representative of a cutting-edge investor from the hard technology industry. She believes that the next 10-20 years is a golden opportunity for China's hard technology venture capital, hoping not to chase the wind, down-to-earth, focus on doing a good job in science and technology investment, in the Internet 3.0 era to create an investment institution that is both deeply rooted in the industry and respected by the whole industry chain, become a reliable partner of hard technology enterprises, truly and continuously help entrepreneurs in the co-pilot's seat, and contribute to the development of the domestic hard technology industry with the help of capital.
Siyu Chan attended High School in Singapore, graduated from Peking University with a bachelor's degree and graduated from Columbia University in the United States. Prior to joining the PE industry, she joined the New York branch of the world-renowned listed hedge fund Man Group (LSE:EMG) as one of the youngest employees, helping Insman obtain the first batch of Qualified Domestic Limited Partner (QDLP) trading licenses in China[1] [CM2], raising and issuing a number of star stocks, bonds, futures, CTA quantitative and multi-investment strategy funds, and expanding the hedge fund and alternative asset management business in Greater China.
Since then, she has served as an executive director of Haisong Capital, responsible for the fundraising and operation of a number of US dollars and RMB dual currencies totaling US$3 billion, family office investment, post-investment management of nearly 20 invested funds and more than 50 invested enterprises, listing exit and industrial ecological construction.
FGA: Please briefly introduce the Haisong Capital you represent
Founded in 2017, Haisong is a private equity investment management institution focusing on the hard technology track in TMT and healthcare. In the field of TMT, we first focus on the hardware industry, including chip semiconductors/integrated circuits, big data, 5G, Internet of Things, etc.; second, focus on SaaS and industrial Internet+, including AI enterprise service software, industrial design software, etc.; and third focus on new materials, new energy, carbon neutral carbon peaking, advanced intelligent manufacturing and other tracks. In the field of healthcare, we focus on new drug research and development, innovative medical devices and digital health, and the recent hot synthetic biology is also in the layout and mapping.
We are flexible in the way we invest. We focus on growth-stage investments, taking into account both early-stage and Pre-IPO investments; in addition to PE funds, we also have family offices, secondary market funds and special acquisition funds.
We are believers and practitioners of price investment, adhere to the investment research drive, and internally create a research platform to assist the first and second level investment teams to find high-quality targets that can be held for a long time. For example, in the field of chips, we have excavated a set of "one horizontal and three vertical" investment logic through research: one horizontal, that is, the semiconductor is centered on chip design, from upstream IP, EDA, design services, to downstream chip manufacturing, packaging and testing, and manufacturing packaging and testing upstream, such as semiconductor equipment, materials, detection and measurement equipment, etc. The full coverage of the entire industry chain; the three verticals, that is, the center around the chip design, in three key industries, such as data centers, smart cars, 5G communications / Internet of Things and other three vertical directions, covering a wide range, Such as 5G baseband, AI chips, GPUs, MCUs, IGBTs, three and a half generations, data exchange, storage, power management, display drivers and optical communications.
When Haisong invests in chips and other hard technology tracks, it insists on deepening the research maps of Top-down and Bottom-up, wearing "telescopes" and "magnifying glasses" to form a deep industrial cognitive barrier. In addition to the underlying research-driven hard technology investment, we value three investment concepts: underlying technological innovation, vertical landing scenarios, long-term value creation (including ESG and social value), and adhere to the first principle of "things first, people first". That is, how the company's own business is, whether the team matches, of which we attach the most importance to the founder's Integrity, of course, but also to judge the timing of the project entry, and evaluate the professionalism of the entrepreneurial team with the help of the capital market and the integration of industrial resources.
Thick accumulation, do not care about overnight or one city and one pool, focus on the hard technology strategy makes us about to usher in the harvest season. Judging from the current development of all Haisong enterprises, 100% have follow-up financing and progress smoothly, and the number of IPOs or mergers and acquisitions has reached nearly 10. It's a very happy thing. In general, at present, Haisong has formed an ecological circle of friends in the hard technology industry, especially in the fields of chips, new energy and new materials, new drug research and development, etc. We will continue to adhere to the difficult and correct direction in the future, immerse ourselves in hard work, and have a long way to go.
Haisong was awarded the TOP 10 Best Private Equity Investment Institution in 2020, and Chen Siyu received the award on behalf of the representative
FGA: How do you build your new brand and build your core ecosystem when managing funds and empowering portfolio companies? Please share successful investment examples.
At present, we have laid out more than 50 hard technology enterprises in China and the United States, including Yitang Semiconductor, Jichuang North, Horizon, Black Sesame Intelligent Technology, Clover Bio, etc. Among them, a number of projects have withdrawn, nearly ten projects have IPO, and five or six projects have been lined up for listing this year.
We have also cooperated with some high-quality invested enterprises to establish a number of independently operated strategic ecological Co-GP funds, such as Beidou Haisong High-tech Industrial Merger and Acquisition Fund, Horizon Haisong AI Ecological Fund, Zhongke Haisong New Energy Industry Investment Fund, etc.; and established strategic cooperation with leading listed enterprises in the industry, such as China Unicom, Changan Automobile, State Grid, China United Industry, Beidou Xingtong, etc. for deep binding.
The essence of doing funds is also entrepreneurship, and enterprises and funds must create long-term value in a real, continuous and personal manner. The domestic PE & VC market is extremely inward-looking, and it is difficult to build new brands from 0 to 1, and it is necessary to differentiate.
The difference between Haisong and most PE institutions lies in the accumulation of deep industrial resources. This is inseparable from the entrepreneurial experience and industrial operation of our founder, Mr. Chen Liguang, for many years. In the future, we will continue to give full play to the advantages of industrial resources, closely bundle with the leading companies in the industry that have been invested and cooperated, and hope to cooperate with more hard technology head enterprises to create good economic and social value.
FGA: What is the logical reason and specific investment strategy of Haisong focusing on hard technology?
Our continuous firmness in Long China and Long DeepTech is based on a summary of the development process of China's new economy Internet in the past 20 years, which is briefly summarized into the following three stages:
1, 1995-2005: The 90s were born with email and the first graphic browser Mosaic (the predecessor of Netscape), the emergence of Netscape in 1995 led to a global Internet revolution, Silicon Valley emerged Amazon, Ebay, Yahoo, Salesforce, and Google in 1998 and a large number of .com companies.
This wind of Internet entrepreneurship blew to China, and there were portals such as Sina, Sohu, NetEase and later Dangdang.com and Excellence.com, as well as e-commerce + search engine websites such as BAT that were established later. This decade is Internet 1.0.
2, 2005-2017: 58 The birth of group buying websites such as Tongcheng, Youku, Chaji.com, Meituan, Ele.me, etc., as well as Byte and Didi, which were established in 2012, are all in the e-commerce subdivision industry to do more subdivision cultivation and business model innovation. At this time, in addition to Amazon continuing to expand e-commerce in the United States, there are further expansions in chips, materials, network security big data, cloud computing, enterprise services, streaming media and other fields, such as Zoom, which was established in 2011, as well as Palantir, Palo Alto Networks, Workday, Uber, Netflix, Snowflake and a number of basic technology companies that serve the Internet economy. This decade is Internet 2.0.
3, 2017-present: China has entered a new normal of the economy, the development of the traditional real economy has encountered bottlenecks, the supply of production capacity exceeds demand, the market giants have formed, the Internet economy with pure business model innovation is difficult to further expand, and the trade war has forced us to develop a safe and controllable underlying core basic technology (that is, Xinchuang). Such as logistics and new infrastructure track, the intelligent upgrade brought by the massive data of the Internet of Things; such as the automotive field, the intelligent opportunity of production tools in each link of car manufacturing; such as the intelligent manufacturing industry, there are many unknown small counties in China, and the factories in the county only produce one category of products, but they are "hidden champions"; the mixed reform and spin-off of central enterprises in the field of logistics B2B, under the new pattern of double circulation at home and abroad, expand the opportunity to go to sea, docking and integrating global supply chain resources, that is, the Internet 3.0 stage.
Weak water three thousand, take only one scoop. We hope to focus on hard technology investment in the Internet 3.0 stage in the future, such as chips, AI cloud computing big data, 5G, medical and so on. Combined with the upgrading of trillion-level traditional industries, devote themselves to the real economic digitization and Internetization, abide by their own ability boundaries, do something but do nothing, and help empower a large number of China's top hard technology companies to go to the world.
FGA: Having worked with so many great investors and entrepreneurs, what are the spiritual qualities that have contributed to the firing point of cooperation with them?
Investors are lucky, the industry is willing to give hard-working and reliable people the opportunity of the times, we have supported many top investors and entrepreneurs in China and the United States through the home office and the Haisong platform in the past, experienced many wonderful homerun deals, and also brought good financial returns to our funds and LPs.
But I've always believed that investing is essentially just a tool to change and connect with the world, and you can't put the cart before the horse. Earning money is not as good as earning cognition and earning freedom, and the strength to make people insist comes from true love, that is, from the heart of liking, in order to have the meaning and value of work. So find a career you'll love for life, jump in, and stay focused and simple. Continuous love can continue to learn, grow and iterate, and resist entropy increase, which is the case in work and life.
A passage about investors said that the fund fundraising and investment management is fully covered, so investors are raising funds in addition to their daily investment and kneeling projects. I don't like to socialize outside of work, my life is minimalist, and I don't waste time on people and things I don't like. Stay away from smart people who are too eloquent, and choose to walk with reliable people who have ideals, break boundaries, and do things. Simplicity is more difficult than complexity, only by continuing to focus on simplicity can we not be trapped by the noise and inward volume of the market and maintain independent and deep thinking.
Second, always maintain the beginner's empty cup mentality, never be satisfied with yourself, and practice diligently for more than 10,000 hours. Daily full 20 hours of uninterrupted meetings and high-intensity business trips are the common style of peers, last year's Spring Festival, the use of overseas dollars do not take a holiday time difference, I pulled the box to open the company's year-end summary on the day directly flew out of the business, in the United Kingdom, the Middle East, the United States and other places for more than two consecutive months to run financing + see the project, but also fortunately in the most difficult period of the epidemic successfully completed the Haisong DOLLAR II fund of 400 million U.S. dollars off.
Entrepreneurship fund and entrepreneurship do business, most of the early days are rejected and poured cold water, but I always believe that the world will eventually reward hard-working people, believe that life is not a road in vain, every step taken counts.
Third, distinguish between entrepreneurship and business spirit, do business with broader goals and ideals, and do not take profit-seeking as the ultimate goal. We do not advocate the spirit of businessmen, and are willing to support excellent entrepreneurs and scientists with real money and silver, and use the industrial resources behind them to help enterprises land and commercialize.
Good times entrepreneurs and scientists are the ones who can truly help China's technology industry and the real economy to produce disruptive innovation breakthroughs, and they are also partners who are in line with our values and can cooperate for a long time.
Starting a business is a problem when you think about it, and you have an answer when you do it. You may want to do a at first, then do b, and the result is successful in c, and finally Dacheng is in d, which is unpredictable. As long as you are determined to continue to innovate in the field you love, believe that it is more important to do the right thing and do things correctly, continue to toss and turn, and create value, you will definitely break out in a certain direction in the future.
Successful people are different, and if you have to find common ground, I think it is ultimately the triumph of values. To borrow a value that was very useful to ray, the founder of Bridgewater, and became my internal motivation: to Live, to Love, to Learn and to Leave a Legacy. Doing business and investment is of course profit-seeking, and practicing capital for good can help you go further. At any time, we must not give up goodness and sincerity, and we must not forget our original intention and why we set out.
Siyu Chen and Ray Dalio, founder of Bridgewater Fund, were invited to attend the 60th Annual Grammy Awards
FGA: China's private equity industry is growing rapidly, and as of the end of July this year, the total amount of private equity funds raised in Greater China is close to the level of last year. What do you think of the five-year market outlook and opportunities?
Investors are the longest-term optimists, because they believe, so they see. We insist on being optimistic about China, heavy positions in China, bullish on China's hard technology, optimistic about China's economy, and believe that China's continued fundamentals have not changed, and the foundation for the development of the capital market is still solid.
Believing in the power of belief, we will adhere to the following three points in the near future:
1. Follow up on policies and invest in industries encouraged by national policies.
In the past 20 years, our capital has mainly been concentrated in circulation and distribution, and the capital premium of Internet platforms has almost peaked this year. Later, back to the direction of "manufacturing power" and "quality power", the focus is on the production link: advanced manufacturing, transformation and upgrading of import substitution, and the point of the neck of the industrial chain supply chain. Such as double carbon green industry: 2060 carbon neutrality, new energy, smart grid, smart transportation, carbon capture, emission reduction technology materials. Three-child industry: mother and baby, assisted reproduction, consumption. Aging: health care, new drug research and development, tumor precision medicine, etc.
2. Specializing in domestic and foreign M&A transactions in the field of special new and hard technology.
It is necessary to be locally based and cultivate a keen international vision. Overseas buyout funds have introduced international transaction models, popular targets (biomedicine, medical health, semiconductors) continue to heat up, and many overseas advanced and mature technologies can now be acquired at the right price, applied to the huge domestic market and a more optimized supply chain, accelerating industrial integration.
3. Adapt to the new regulatory situation, healthy and orderly competition, and create value.
▪ The Fifth Plenary Session of the Nineteenth Central Committee and the Central Economic Work Conference proposed to strengthen anti-monopoly and prevent the disorderly expansion of capital, and effectively prevent risks. The swarming of capital has brought disorderly expansion competition, the original valuation system has been broken, the valuation of star projects is extremely high, contrary to economic laws, everyone thinks of secondary market arbitrage, and finally can only be paid by small and medium-sized institutions and investors.
This kind of chaos of creating bubble outlets has also spread to hard technology, and 50% + institutions in the primary market are claiming to be watching chips, but semiconductors cannot use the Internet to play to invest, it has its own objective development rhythm.
▪ Last year's series of regulatory policies and anti-monopoly case penalties, and this year's tenth meeting of the Central Financial and Economic Commission emphasized the common prosperity, high-quality development and efficiency and fairness, all of which are sending signals to the market: the regulatory system has accelerated and improved, and the development of the platform economy has become benign and orderly.
We also continue to pay attention to the upcoming Sixth Plenary Session of the CPC Central Committee in mid-November and the Central Economic Work Conference at the end of the year, and look forward to the regulators' continued adherence to the market-oriented economy and the guidance of the orderly development of healthy competition in the investment community.
▪ Investors should return to their hearts, be down-to-earth, be humble and humble, participate in promoting the healthy development of the platform economy, devote themselves to serving the real real economy, invest in industries encouraged by national policies, do innovative conscience capital, encourage scientists to have an entrepreneurial spirit, be responsible and responsible for environmental friendliness and social friendly capital, and work together to create long-term value.