All In Intelligent Internet: Behind The "Zero Failure Rate" Of Indus Capital

The expected return on investment of parasol project is about 3 times after the establishment of the project.

"It's not right to rely on a star project to cover up all the ugliness. Hit rate is particularly important for sustained and stable returns. That way, your fund will remain stable. " Liu Qiankun, founding managing partner and President of Indus capital, told 21st century economic reporter.

Liu Qiankun's experience is quite diverse. As an early journalist, he participated in the founding of the economic observer, and also initiated the establishment of China's TMT International Chamber of Commerce, an early TMT community in China. It was during this period that he got acquainted with Tong Weiliang and Gao Shen, two other management partners of sycamore capital.

After the establishment of "VCT" and "vertical real estate" in 2006, he started to invest in real estate in China.

After the establishment of Indus capital, Liu Qiankun rarely received media interviews. After returning to the public view, he said that there are only three ways for Chinese PE / VC investment institutions to survive.

"For large institutions with a long history and golden spoon birth, there is no problem for a single fund to achieve more than 6 billion yuan; with the improvement of professional requirements for investors' industry, there is also room for institutions to be very specialized in specific segments; for comprehensive private institutions like ours, there is a need for a stable and powerful support platform." Liu Qiankun said.

From VC2.0 to multi asset management

At the beginning of the establishment of sycamore capital, the VC industry paid more attention to the trend of Tong Weiliang, the former Gobi investment partner. At that time, Tong Weiliang was already one of the representatives of VC youth school in China, and he invested in camera 360, pink diary, aunt Mo, keziquan and other projects.

In fact, there are three founding partners of Indus capital, including Tong Weiliang and Liu Qiankun, as well as Huang Jiangnan, one of the "four gentlemen of reform" and former chief economist of Everbright Securities.

In 2014, the venture capital of sycamore began to focus on the investment in the field of enterprise services. With the participation of Gao Shen, senior partner of Lianchuang Yongxuan, the investment of sycamore capital in the TMT field further focused on the industrial Internet, smart education and smart healthcare.

Since then, Indus capital has established three major industrial investment sectors: new energy and new materials industry mainly focuses on equipment and materials upstream of new energy, semiconductor industry focuses on equipment and materials, and big health industry focuses on investment opportunities in medical device field.

Little known is that sycamore capital established the first master fund in August 2014, and participated in the initiation and establishment of Yangtze River industry fund, Haihe fund and Qianhai master fund. So far, it has managed three master funds with a total scale of 6.5 billion.

"We don't want a single plate to be big enough. We just need a single plate with enough recognition to become the head GP in the field of professional segmentation." Liu Qiankun's requirement for the team is to adhere to the sniper's method in subdividing the field, "not chasing the wind, not chasing the high, not doing evil."

Looking back, parasol capital, which initially appeared in the public view as VC2.0, quietly launched the diversified comprehensive asset management business layout of "venture capital + industrial merger and acquisition + Master fund" in 2015.

For a private investment institution with a history of only seven years, the development of Indus capital has been rapid. The core structure of the three business sectors has been completed, and the management scale is nearly 10 billion yuan. But Liu Qiankun also knows that there is still a long way to go before the team becomes a top diversified integrated asset management institution.

"From global and domestic experience, it will take 20 years to rise. In the first 10 years, we only set up a framework, and in the last 10 years, we gradually realized the assets under management of more than 100 billion yuan. " Liu Qiankun said that the team's progress toward the ideal model has just reached 40%, and it is still in the process of starting a business.

All in intelligent Internet

After the Spring Festival in 2020, the new crown epidemic is rampant, and enterprises can only resume work online. The working status of PE / VC companies has changed from high-frequency business trip to more post investment support for invested projects.

The epidemic situation is also bringing changes to people's production and lifestyle. The areas of concern of equity investment include the increase of online education penetration, the acceleration of industrial Internet process, and the improvement of national and social investment in health care.

In an email to employees during the outbreak, Liu Qiankun said, "this will be our main battlefield. In addition, those who have the strength of LPS will also intensify the tilt to those who are ready for GP

In this interview, Liu Qiankun told the 21st century economic report that the core strategy of Indus capital TMT plate is to focus on Intelligent Internet, which is the "aiot" frequently mentioned by technology giants since 2018.

Liu Qiankun believes that the core of intelligent Internet is a new generation of Internet driven by "intelligence + networking".

It is defined as a new generation of intelligent computing, Internet-based and intelligent production services based on big cloud computing and Internet.

In fact, with the traditional to B service definition, Indus capital has invested dozens of enterprise level services since 2014.

Indus capital began to lay out intelligent Internet a few years ago. Its representative projects include ten thousand Zhang gold, selling good cars, sinovision, and tuoshen technology, which play an important role in the market segments of various vertical industries.

The wave of intelligent Internet has brought systematic investment opportunities for intelligent and industrial transformation and upgrading with strong technical foundation. Industrial intelligence, intelligent medical care, intelligent education and industrial Internet will be the next step in the development direction of parasol.

Behind zero failure rate

In this interview, Liu Qiankun revealed the "zero failure rate" performance of the fund in seven years.

In addition to the industry M & A fund, Chinese parasol capital mainly invests in a + round and b-round projects, so it can choose not to take risks like early VC.

More on the team's investment code. Liu Qiankun said in an interview: "many people say that VC is a business with probability, and it is most important to cast several star cases. This is a misunderstanding of VC. "

At the decision-making meeting of Indus capital, if the team thinks that the investment risk is greater than the return, it will choose to give up no matter how high the potential return is. They also expect the project to have three characteristics: high moat, clear competitiveness and cash flow guarantee.

The 21st century economic reporter learned that due to the self-demand of "no pursuit of the wind" and "no pursuit of high", Indus capital only launched two new projects in 2018 when the valuation was generally high, and then invested in seven projects after the return of market valuation in 2019.

As a private investment institution, Chinese parasol has chosen the path of diversified comprehensive asset management.

"The fundraising cycle is getting longer, the past year, now a year and a half. In the past two years, it is more difficult for institutions to die Liu Qiankun is very pleased that the focus of the subdivision field has won them the favor of some industrial capital, and it will be possible to continue investment layout through more innovative cooperation methods.

Liu Qiankun is cautious and optimistic. In his internal letter of February 9 this year, in addition to observing the severity of the epidemic, he also expressed his expectations under the severe market environment.

"China's equity investment industry will usher in a golden age after the epidemic." This includes not only the emergence of large-scale investment and financing, but also greater efforts to reform the capital market, as well as the liberalization of relevant supporting policies of the government, state-owned enterprises, central enterprises and financial institutions, Liu wrote.

In the past few months, as expected, the reform of domestic capital market has continued to deepen, and the policy of insurance capital in the field of equity investment has also been relaxed.

At the end of the interview, Liu Qiankun said happily, "the reform of the securities market has opened a door for us. The development and growth of the capital market is the fundamental symbol of a country's prosperity, which is the ultimate driving force of scientific and technological innovation. "

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