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Star China tech Investor Boyu wants to visit Xi’s era of ‘common prosperity’

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Alvin Jiang was 24 years old and started working for Goldman Sachs when he was hired by one of China’s leading brokers to help establish Boyu Capital, a Hong Kong-based business company.

For Sean Tong, who founded Boyu in 2010 after running a Chinese business for US companies General Atlantic, Jiang was a bright prospect. A handsome, Harvard graduate with a grandson of Jiang Zemin, President of China from 1993 to 2003.

This initially gave Boyu a reputation as a company of “princes”, a term used to refer to the children and grandchildren of Chinese Communist Party leaders, although Tong and its founders, who also included senior officials in the country, had business acumen. .

Ten years later, the low-cost company closed its US $ 7bn wallet, as did a Chinese business. arrested in an unprecedented chaos of order.

The company that used Chinese technology in the last decade to become one of the most successful businesses now has to change its approach to align Beijing’s vision for the region, which emphasizes “common development” in market success.

“Some sectors are not doing much, especially online shopping companies,” said one person who is familiar with the way Boyu changed. “But some are enjoying more and more programs, such as semiconductors, electric vehicles and other high-tech means. Advertisers also need to be more cautious than ever before about potential dangers.”

Boyu is best known for making billions of dollars from the first major professional bets including Alibaba, Jack Ma’s ecommerce platform launched in 2014, while also looking at emerging, financial and healthcare companies.

The Hong Kong-based Boyu Capital climbed the professional ladder of China to become one of the country’s largest savings investors. Now, it needs to change with Beijing’s crackdown on the sector and emphasize economic inequality © Tyrone Siu / Reuters

The company was poised to replicate its Alibaba scam by the end of 2020 as the first investor in the Ma, Ant Group, in front of regulators. banned which would be the largest donation in the world.

Boyu also encountered government rebels private study companies in July – the company was the start-up of Yuanfudao.

However, it slipped off the bullet after lowering its value Didi Chuxing before the riders-hailing group for the first June public offering in New York, according to people familiar with its finances. Didi share price fell after the Chinese government launched a data security investigation.

In addition to Didi, people close to Boyu said they had invested in seven or eight companies that successfully launched IPOs last year, inclusive. Cloud Village, NetEase’s music streaming platform, is the founders of biological sciences such as Brii Biosciences and KeyMed Biosciences.

“A few years back you would still have some of the biggest environmental companies on the market – such as Alibaba, Ant, Meituan and ByteDance,” said the Boyu businessman. “But this market is more crowded than ever and the opportunities for emerging environmental companies are dwindling. Boyu needs to focus more on winners in niche segments.”

Boyu and Alibaba’s initial success was due to an accidental encounter. In the early 1990’s, Ma, then a university lecturer in English, was the judge in an English language competition in her hometown in Hangzhou, eastern China. Tong was one of the high school students who competed in the event, according to people who are well aware of their relationship.

Ma, who became of the world a very popular merchant, was impressed by Tong’s performance and praised him. This was the beginning of a 30-year-old friendship.

Tong was in his mid-30s when he founded Boyu. He met Jiang while the latter was a student at the General Atlantic office in Hong Kong.

Children and grandchildren of Chinese leaders have traditionally enjoyed the opportunity to win elections, and foreign businesses in the country have turned to them. as directors.

Liu Tianran, son of vice-premier Liu He, confidant of Xi Jinping, establishes Ideas for the company Skycus Capital towards the end of 2016. Skycus has invested in the units of Chinese superpowers Tencent and JD.com, rival Ants and Alibaba. Wen Yunsong, the son of former Prime Minister Wen Jiabao, launched New Horizon fund in 2005, when his father was in power.

But since Xi became the leader of the Communist Party in 2012, the influence of the princes has been strong decrease, investors and experts said.

“Princes who are still working economically are very low, living in smaller areas, with less money than Boyu,” said a former salesman who was involved in the restructuring of state-owned enterprises. “What makes Boyu different from the number of his friends, the size of the bag… Is history, which means he should not trade in princesses.”

Kerry Brown, a Chinese specialist at King’s College London, said “now it’s probably a big problem as a help to have these statistics. [princelings] in union with you. ”

“Now there are a lot of people out of this [elite] highly skilled networks, “he added.” Why not trust a person because they are his or her relatives? “

Boyu, Tong and Jiang declined to comment.

In Boyu’s case, initiating a corporate campaign helped to improve the situation, according to the company’s staff. In addition to Jiang, Tong also named Louis Cheung, former President and chief financial officer of Ping An, China’s largest insurance company, and Mary Ma, Lenovo’s chief financial officer when the Chinese company bought IBM PC business on the label. 2005 operation. He later joined them TPG Capital, US equity company.

“If it weren’t for Sean, neither Mary nor Louis would be worried [Boyu’s] set it up, ”said one longtime CEO.

From 2011 to 2019, Boyu raised $ 4 billion, and last year completed one-fifth of $ 6.8bn, according to a number of people involved. It is the largest US dollar fund in China run by an independent manager, according to AVCJ, the data provider. Boyu has also completed three small payments for renminbi funding and is now raising four cents.

The company has expanded its offices in Beijing and Shanghai, where Jiang resides. It reopened the Singapore office in late 2019; Tong moved there from Hong Kong in 2020.

But Boyu is now embroiled in political controversy. Xi has made it clear that no company is immune to regulatory risk if it does not support “common development” in planning what it wants to do this year. the third stage which has never happened as the head of the party.

“Boyu made the right choice but the same relationship will not always give you the same results – look at Ant,” said one Boyu businessman. “What China has in common is, you never know when the threat of a coup will hit you.”

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