JD Capital Launches Another Round of RMB Fund-raising
2015-11-12
China’s economy is entering into the “new normal”, a gear-shifting stage that features slower GDP growth and structural adjustment. In response, how should investment institutions spot chances among the changes and reap solid returns on investment.
Recently, the “JD Capital Strategic Equity Investment Fund” (or “Strategic Fund”) was officially launched for capital raising. The Fund aims to bring steady, high yields to investors by taking advantage of the systematic investing opportunities generated by China’s economic restructuring and capital market development.
New windows of opportunities in the “new normal” period
Despite the current slowdown, China’s economy still holds great potential in the long run, as economic restructuring will improve efficiency and labor quality and deepening reform will unleash vigor and vitality. Most of the predictions by mainstream organizations and economists for China’s economic growth rate during the 13th Five-Year Plan period fall between 5.7% and 7%, a figure higher than the world average.
Changes bring chances. Amid the restructuring and reforms under the 13th Five-Year Plan, new windows of opportunities for investment will be opened in different fields and industries: industries undergoing reforms such as the financial sector, state-owned enterprises, environment and public utility industry and military industry; technologically upgrading industries like technology, media and telecom (TMT) and advanced manufacturing industry; service and health industries; industrial integration including domestic and overseas mergers and acquisitions. JD Capital’s “Strategic Fund” will give priority to the above-mentioned areas.
A look at the big picture of China’s capital market reveals a much lower securitization rate than mature and some emerging markets. Nevertheless, with much unsecuritized assets in China, there remains room for improvement in this regard. Also, China’s capital market holds great potential: reform is in full swing; innovation is booming; the NEEQ is prospering; a strategic emerging industries board has been created on the Shanghai Stock Exchange (SSE); a registration-based Initial Public Offering (IPO) system is taking shape; favorable policies for mergers and acquisitions on capital market have been introduced. All these will provide institutional investors a better exit mechanism and more involvement opportunities in the capital market-assisted industrial integration.
Share real-economy-generated dividends through value investing
Besides being a long-time value investor, JD Capital also assists investee companies in value enhancement with its own expertise, guaranteeing solid returns for investors.
The newly revealed Strategic Fund, like JD Capital’s previous flagship funds, is mainly targeted at institutional investors, conglomerates and high net-worth clients. Its previous clients include Allianz Insurance, Vertex Venture Holdings, China Reinsurance (Group) Corporation, Aeon Life Insurance Company, Ltd., and Buchang Pharmaceutical Company, etc..
The Strategic Fund will, as always, practice the principle of value investing and focus on equity investment in growing or matured companies of high quality. In an age of rapid economic growth, technological advance and consumption upgrading, the Fund aims to support and share the booming momentum of some companies. Meanwhile, following the trend of transition, upgrading and securitization, the Fund will facilitate industrial mergers and acquisitions, reap the resulting dividends, and deliver long term, steady and relatively high returns for our investors.
JD Capital has been ranked among the “Top 10 Private Equity Firms” for six consecutive years since 2009. The company has under its management over 30 billion yuan’s worth of RMB funds and over 0.3 billion dollars’ worth of USD funds. JD Capital has invested in more than 240 companies, among which over 100 have gone public, got listed and exited the venture capital market. The Internal Rate of Return (IRR) of exited projects amounts to over 33%, while the IRR of those still under management exceeds 30%. In 2015, although for some time China’s authority suspended IPO approval, there were still nine JD Capital invested companies went public by the end of the year. Besides, JD Capital has helped complete 30 merger and acquisition cases over recent years.
With a professional investment system and an aspiration for perfection, JD Capital keeps innovating in its cooperation with investee companies, seeking common development; on the other hand, it makes every investment decision with the utmost discretion to create value for its clients by seizing opportunities and utilizing financial tools. In the future, JD Capital will commit more efforts to boost innovation and to optimize resource allocation across the whole society.