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Everbright Holding Wang Ou: RMB Fund Will Define The Era Of New Economy 2.0

2020/12/26 11:22:00 0

RMB FundEconomyTimes

In the 40 years' history of modern equity investment, US dollar fund, as the setter and pioneer of industry standard, is considered to be the mature mode of the market. However, the performance of RMB fund lags behind the US dollar due to its late start and unclear rules.

      In response, Wang ou, a member of Everbright Holdings management and decision-making committee, said at the 10th China innovation capital annual meeting held in Zhuhai recently that in the past two years, the state has issued a series of heavy policies to deepen the reform and opening up of the capital market, including the construction and improvement of the science and technology innovation board, the promotion of the registration system of the gem, the implementation of the new securities law, and the improvement of the delisting system These institutional changes have enabled RMB equity investment to realize the closed-loop of "raising, investment, management and withdrawal" in a real sense. RMB funds have gone out of a completely different business model from the US dollar market. The next era of the new economy will be defined by RMB funds.

Wang ou. Information map

Under the background of negative interest rates in major economies, asset rotation will over allocate alternative assets

Since the 2008 financial crisis, the global economy has been characterized by excess liquidity and flooding of money. As one of the few investors in China with senior international and domestic experience in alternative asset management and securities market supervision, Wang Ou participated in the reflection and analysis of post disaster reconstruction on behalf of the CSRC during his tenure in the CSRC. He found that in the environment of global currency over issuance, many new phenomena appeared, even rewriting the basic economic and financial theories.

"In the past decade to 20 years before the financial crisis, over issuance of money had caused serious inflation, but it was not reflected in CPI. It was only after reflection that we found that the over issuance of money reflected more asset bubbles, which were overlooked in traditional banking and finance, and there was no effective channel to track it until it burst out," he said

This year, affected by the new crown epidemic, the global economy has been hit hard. In order to alleviate the negative impact of economic downturn, the global central bank has opened a new round of easing cycle, and major economies have entered the era of negative interest rates. Wang Ou pointed out that in the future for quite a long time, the overflow of currency liquidity will be inevitable.

In this context, the management scale of more and more institutions is expanding rapidly. The most painful choice and challenge they are facing is how to ensure the value and appreciation of assets. Wang Ou said that the allocation of large categories of assets in the primary market often determines 70% to 80% or even higher returns. In the next 10 to 30 years, investors' asset rotation will focus on alternative assets. "In the ten years before 2008, in the United States, you had to match stocks to get sustained and stable returns; in China, you could get high returns by allocating real estate. Today, China is boosting the new economy in an all-round way. In the past five years, if you don't match up with the new economy, it's hard to call the return first-class. "

With the end of the rising cycle of real estate, Wang Ou believes that the rotation of large categories of assets has reached the period of over allocation of alternative assets in the current economic cycle. "Relevant policies also encourage more and more funds to enter the equity investment market, and our industry is facing historical opportunities.".

Institutional reform promotes the pricing of domestic assets in RMB, and RMB fund leads the new economy

For a long time, the industry generally believes that due to the higher degree of marketization, higher transparency, less uncertainty, and different requirements for new technologies and profits, a number of super Unicorn enterprises in the past 20 years have been supported by US dollar funds and finally listed overseas. Dollar investment is also regarded as the industry's leading vane. However, due to geopolitics and other reasons, the uncertainty and opacity of US capital market on China's assets audit has greatly increased, and its advantages in the past are weakening. On the contrary, with the implementation of China's registration system and other innovative systems, the advantages of China's capital market are becoming more and more clear.

From CIC, the world's largest sovereign fund, in charge of global PE business to joining Everbright Holdings, a dual currency cross-border asset management company, Wang Ou has a profound understanding of the US dollar market and the RMB market. He believes that in this case, in the future, the equity investment industry will be more and more priced in the domestic market with RMB.

At the same time, with the joint efforts of the government, capital and market participants, the RMB market will step out of its own "personality". He stressed: "any industry will experience the development process from immature to mature, from non mainstream to mainstream. The RMB model may be different from the US dollar model that we are familiar with. However, one side of the land breeds another party, and Chinese investors have their own unique needs. Whether this demand is understandable from the perspective of traditional dollar investors, when the RMB market gradually explores a unique model independent of the dollar model, the Chinese model will be verified by the market. "

According to Wang ou, there is a very good trend in the current RMB market investment model: it is moving from a poor exit channel to a closed loop of "raising investment, managing and withdrawing". In recent years, in order to promote the further development of asset securitization market in China, the state has launched a series of institutional innovations, including the establishment of the science and technology innovation board, the promotion of the registration system of the science and technology innovation board and the growth enterprise market, and a series of institutional reforms on the delisting of listed companies.

In his view, there is only one objective of these institutional changes, which is to reduce the administrative threshold of listing as much as possible, so as to make the listing and delisting of China's A-shares more market-oriented. From the present point of view, these measures have achieved initial results, and China's equity investment market can gradually achieve closed-loop.

Wang Ou pointed out that behind the institutional change, the ultimate goal of the government is actually to enable assets in China to be valued and traded more and more in RMB. For RMB funds, it also provides more and more trading products and trading channels. Wang called on investors to calm down, learn to take root in the RMB market environment, and develop together with the RMB market.

Since its establishment for more than 20 years, Everbright Holdings has been expanding its AUM to HK $157.2 billion. Through its funds and self owned funds, Everbright Holdings has invested in more than 300 excellent enterprises in China and the world, including UnionPay commerce, Goldwind technology, cecep wind power, Huacan optoelectronics, BGI, Beida pharmaceutical, Meizhong Yihe, Xianjian technology, focus media, iqiyi, Shangtang technology, Weilai automobile, capital airport of Albania and boreal bus of Norway The company, BPG group, wish e-commerce platform, xjet 3D printing, satixfy, etc., have invested in real estate, aircraft leasing, health care, pension industry, new energy, infrastructure, high-end manufacturing, high-tech, cultural consumption, etc., of which more than 150 enterprises have withdrawn through listing in China and overseas markets or M & a transfer.

 

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