Social Security Fund Re-expands PE Investment Map "Capital Order" with Gimp Fund (VC334)

Social Security Fund Re-expands PE Investment Map, Xinxin Capital and Gimpo Fund "Order"

Towards the end of the year, CITIC Capital and Gimpo finally received gift packages from the Social Security Fund, which received investment quotas of 1.5 billion yuan and 1 billion yuan from the Social Security Fund, respectively, which made PE investment in social security funds account for about 2% of their overall asset allocation.

The upper limit of the asset allocation of the social security fund PE is 10%. Although the current allocation ratio is far away from this, due to the adjustment of the National Development and Reform Commission's filing system, investment in the social security fund is regarded as a necessary option, which will increase the difficulty factor of the social security fund draft. The PE is still being explored in many ways.

CITIC and Gimpo "order"

CITIC Capital and Shanghai Financial Industry Fund (hereinafter referred to as "Gimpo") have been "registered" for social security funds for a long time.

As early as 2008, CITIC Capital has entered the social security investment PE alternative zone. Three years of preparation and one year of due diligence are long enough. CITIC Capital eventually received a large order of 1.5 billion yuan from the Social Security Fund.

If CITIC Capital ’s waiting is boring, Gimp ’s waiting is tortuous.

At the inauguration ceremony of Gimpo in 2009, the Social Security Fund clearly stated its investment intention, which is not related to Gimpo ’s deep background. As the founding manager of CICC and Shanghai International, Gimpo has become the only industrial fund in China that invests in the financial industry and is regarded as the most perfect combination of Chinese industrial funds.

At the end of the year, the general manager of Gimpo Beduoguang suddenly resigned, and his successor, Lu Houjun, quickly took office in January 2010.

Lu Houjun previously served as the managing partner of the "China-Belgium Direct Equity Investment Fund" in which Haitong Securities participated in the management. The fund is known as a successful example of transnational cooperation, and it is also the earliest fund that the Social Security Fund participated in. During the five years at the helm of the China-Belgium Fund, Yunhai Metal, Zhongyuan Huadian, Chenzhou Mining and Goldwind Technology, which he led the investment, have all been listed, and have achieved investment returns of nearly 5 times, 10 times, 17 times and 70 times, respectively.

A few months later, in June 2010, a new team led by Lu Houjun completed the first fund raising of 11 billion yuan, becoming the largest fund-raising industrial investment fund. It was confirmed that the Social Security Fund was still conducting due diligence on a step-by-step basis, and was not in a hurry to rush the first phase of funding.

As the representative of CICC, Li Hong, the managing director, appeared in a low-key at the fundraising celebration, indicating that CICC did not actually contribute.

The clue of breaking up has emerged, and then CICC and Shanghai International formally parted ways, CICC ended with a withdrawal of shares, and fundraising also dragged down. The investment of the social security fund was suspended. "When the social security fund chooses the PE fund, it attaches great importance to the stability of the fund's investment management team structure." The social security fund said.

As of March 2011, Gimpo adjusted its fundraising strategy to reduce the proportion of financial investment to 50%, turning passive to active, investing in projects while raising funds. Half a year after confirming the stability of the team and the initial investment projects of Gimpo, the Social Security Fund still granted an investment quota of 1 billion yuan.

This also once again broke the law of investment of social security funds. People familiar with the investment style of social security funds said: "In the past, PEs invested in social security funds have often accumulated many complete projects in the industry and mature experience of fund exit. Social security funds have never tried to invest in a new fund. This For social security and the entire industry, giving the industry new opportunities is an encouragement. After all, every single social security investment is regarded as a benchmark by the industry. "However, the person still said very carefully," In fact, Gimp ’s team members already have Years of experience in cooperation with social security, but its portfolio is new, and the market still needs to test its cohesion and portfolio investment capabilities. Compared with mature funds, this type of investment is still riskier. "

The Social Security Fund is not in a hurry to require the invested fund to invest too fast, but is relatively stable and hopes to achieve higher returns in the long run

In addition to investing in new funds, Dinghui's second investment, in 2011, the Social Security Fund completed a 3 billion yuan investment in Dinghui's second-phase fund, accounting for nearly 30% of its total fundraising. At this point, the social security fund investment CDH reached a commitment of 5 billion yuan. This is the second time the social security fund has invested in the same institution after Hony Capital.

CDH achieved the exit of the first social security fund investment PE project in 2011—Hengyi Petrochemical backdoor reorganization of Century Guanghua. In less than two years, the return on investment was about 6 times. "The social security fund is satisfied with its two-year investment income." People close to the social security fund said that the social security fund is not eager to require the investment of the invested fund to move too fast, but is relatively stable and hopes to achieve a higher level in the long run. Return.

On October 18, the two listed companies of Midea Group, Midea Electric Appliances and Little Swan, announced that Midea Group ’s major shareholder Midea Holdings plans to transfer its 3.12% equity of Midea Group to CDH. The announcement did not disclose the transaction price. At fair value, the 3.12% equity value was not less than 650 million yuan.

Yuan Haoran, chief analyst of GF Securities, believes that Midea Group is planning to divest Midea Real Estate in order to clear obstacles to the overall “de-family” listing, which requires a lot of capital investment.

"The investment seems to see the shadow of Hengyi Petrochemical's participation in the reorganization of listed companies, which may be a copy of the successful case." An industry observer said, "It is the relevant investment that has obtained the trust vote of the social security fund."

People close to the social security fund said that Dinghui's second investment is better than investment income and risk control.

New Draft Course

As state-owned shares are successively transferred, the scale of funds managed by social security funds will continue to increase, which will inevitably increase investment pressure on social security funds. As of now, the social security fund is far from the upper limit of 10% PE in its asset allocation.

Therefore, the social security fund is under pressure from all parties to urge it to speed up the investment process and increase returns. The paradox is that the huge amount of social security fund investment, and the amount of investment does not exceed 30% of it, determines that the choice is a large amount of fund.

In addition to actively seeking social security fund-raising, it is a product assembled through a third-party fund-raising agency "mother trust" with the social security fund that is frequently funded by billions of funds and is a potential investor. yuan.

Corresponding to the scale of investment is the enlarged investment risk. If non-professional investors join the high-risk PE field with an investment period of at least 7 years, and shoulder the risk side by side with the social security fund, what will be the consequences?

"Once it is out of control, the consequences will be destined to damage the interests of the public, and even illegal fund-raising cases." A person familiar with the situation said that even if the fund-raising process does not pose a risk, the fundraising will touch the trust (product issuance target) No more than 200 individuals), listing supervision (not more than 50 shareholders of a partnership enterprise) and other cross-ministerial supervision, which puts the risk behind, will amplify the risk of later project withdrawal.

In this context, the National Development and Reform Commission urgently issued the national requirements for the implementation of strong preparations. Foreign-funded institutions, securities firms PE, industrial funds, and mother funds were also included in the record, as well as third-party fundraising and service agencies.

In terms of strict risk control, the NDRC ’s filing of a new policy also opened another door. The successful filing of RMB funds as foreign managers of Carlyle and Blackstone, as well as the entry of securities firm PE, have also become strong competitors for investment in social security funds .

Does this mean that the social security draft will have a new roadmap? It has been confirmed that the new successful filing institutions mentioned above are working hard to introduce social security funds.

In addition to social security, how many institutions have large-scale investment strength? How can there be countless good projects with growth potential? But the law of the industry is insurmountable, that is, after the asset scale rises, the decline in income is inevitable. The widely-recognized fund model in the market may be more suitable for social security fund investment. "This can avoid the administration of large institutions such as social security funds, insurance companies and other investment entities." Ho Fang Feng Chairman of the Board once said.

Although the record has not been completed, the brokerage firm PE Jinshi Fund has this plan. In addition to recruiting returnees to form a parent fund team, Jinshi also actively contacted PE leaders Dinghui, Hony, Heishi, CITIC Industrial Fund, etc., but the plan in preparation is still immature.

It is understood that the social security fund's response to the plan is not strong, the main reason is that the fund with the social security fund now invests in a higher coincidence rate, and it has reached tacit cooperation with these funds.

"Impress the social security fund unless the parent fund has certain special advantages: for example, it has a strategic cooperation relationship with certain funds, or some LPs were not originally qualified investment objects of the fund, and through FOF, they can participate in the investment of the fund and give New and possibly smaller, high-quality funds in the market bring opportunities to increase returns. "According to the views of many industry insiders:" FOF needs to provide value-added services to help investors become qualified LPs and select GPs. If there is no such The specialty is just to gather funds together to form a large scale, which is not attractive to LP. "

Attempts and breakthroughs have gradually revealed the idea of ​​PE allocation for social security funds, thus leaving more room for innovation in the industry.

China's first national-level equity investment compound fund, China Chuang Mother Fund, which is still in the planning stage, may be suitable for the appetite of social security funds.

This super parent fund jointly established by CDB Finance Co., Ltd. (hereinafter referred to as "CDB Finance"), a wholly-owned subsidiary of CDB, and Suzhou Venture Capital Group Co., Ltd., a subsidiary of Suzhou Industrial Park, has a total scale of 60 billion yuan. The scale of the first phase is 15 billion yuan.

If the investment is successful, it is also the continuation of many years of PE cooperation between the Social Security Fund and China Development Bank. As early as 2005, the Social Security Fund and the China Development Bank jointly invested in the China-Belgium Fund and the Bohai Industrial Fund, the first domestic large-scale industrial fund, as well as China's local high-quality PE Hony Investment, to form two domestic LP camps.

At present, investors such as social security funds are waiting for funding from insurance forces represented by China Life Insurance and China Reinsurance Group. As early as the end of September 2010, the China Insurance Regulatory Commission had already opened insurance funds to invest in PE, but so far there is no actual case.

It is understood that the investment of China Life and China Reinsurance Group is still in the “approval” link of the China Insurance Regulatory Commission. Relevant sources revealed that the outstanding amount is not just the amount of capital contribution. As the "Interim Measures for Insurance Fund Investment Equity" still needs to refine the investment rules, relevant policies will be issued in the near future. If the policy is formed, it will not be extended for too long.