[VC / PE "cross border" story: crossing the hills of the industry]
In the past few years, the equity investment industry has undergone dramatic changes. In order to adapt to the changes, many institutions have already jumped out of the comfort zone and explored, adjusted and expanded in different stages, industries and even different asset classes. Many of these structures have formed their own influence and methodology in new fields. Honghui capital, which started its career as a "medical investment fund", began to expand into the consumer sector in the last two years. Huachuang capital, which was the first to be good at TMT investment, also invested heavily in life sciences many years ago This issue focuses on the industry investment expansion cases of the two institutions, hoping to provide industry organizations with samples for future thinking.
On the new year's eve of 2021, new tea company Naixue's tea submitted an application for listing on the Hong Kong stock exchange. The abbreviation "HLC" of Honghui capital appeared in the application documents.
In addition, Honghui capital is also behind the listed atomizer technology enterprise SIMORE (06969. HK), a personal protection product that has entered the market counseling, and banbu, a personal hygiene brand company that has just completed the financing.
In the new year, the market is no longer suitable for positioning Honghui capital with the simple label of "medical investment fund".
For the equity investment industry, the year of gengzi just passed is a year of "crisis" and "opportunity". At the same time, Honghui capital, which has been established less than seven years ago, has also achieved a top-down reform as scheduled.
On the eve of the Spring Festival this year, Wang Hui, founder and CEO of Honghui capital, was interviewed by 21st century economic reporter in Shanghai. There are two kinds of changes, he said. Either they are forced into a corner and have no choice but to change; there are also those who are forward-looking and planned, and take the initiative to promote self-innovation and growth at the most appropriate time. After all, only growth is the most respectable power.
Active change and orderly development
"The success of an organization is not in one battle at a time," Wang Hui said. "It's about self reflection and self iteration in a constantly changing complex environment, so as to realize the driving force of sustainable growth."
Looking back, the change began in early 2019.
After entering 2019, the team has completed the third phase of RMB fund and the third phase of US dollar fund, with the management capital reaching 10 billion yuan.
As of the first ten days of February this year, among the projects invested by Honghui capital, 15 enterprises have completed the listing, three companies have completed the meeting, and a number of projects have applied or planned to apply for IPO; among the listed enterprises, the market value of Mindray medical, yaomingkant, SIMORE international, tiger medicine and KANGLONG Huacheng have exceeded 100 billion yuan.
"When most people in the company are in a particularly good state, it's easy to push for change." With the steady increase of fund scale and investment performance of Honghui capital in 2019, Wang Hui expressed his determination of "reform" to the whole staff at the fifth anniversary annual meeting of the company.
Generally speaking, the reform of Honghui capital is divided into two parts
First, team upgrade. At the beginning of its establishment, the management capital of Honghui capital was only more than 1 billion yuan. The limited management fee should be used in the software and hardware construction of the company from 0 to 1 at the same time. With the increase of management capital, it is possible to introduce talents more suitable for future development.
"We can now afford the same treatment as Boston, and the restrictions are much less." Wang Hui said that today's Honghui is constantly upgrading to internationalization, institutionalization and youth.
Second, strengthen the corporate culture and reshape the working mechanism. At present, in Honghui, the management team never compromise in corporate culture and values, always adhere to the core values of foresight, integrity, diligence and unity, red line thinking, and never give in; while in investment practice and company life, they emphasize openness and inclusiveness, pursue the diversity of practice and the blossom of talents.
In order to make the team more deeply aware of the changes in the company, Honghui capital launched a new OA system and upgraded its logo. New office locations were opened in Beijing and Shanghai, and Shenzhen office was officially opened at the end of the year.
To "probability event"
Combing the investment portfolio of Honghui capital, it can be found that the disclosed cases in the field of consumption include new tea brand Naixue tea, Gehu household appliance brand sushi, maternal and infant care brand Beaba, environmental protection and health personal hygiene brand banbu, pet health brand pet health care brand pet lucky Weishi, etc.
The reporter learned that, as early as 2017, when the US dollar phase II fund was raised, Honghui expressed its willingness to expand the consumption field to the LP. Over the past three years, while continuing to deepen the cultivation of biomedicine, the second and third phase funds of Honghui capital have continuously extended to the theme of health consumption including mother and baby, health products and personal care.
Success comes from continuous betting on high probability events.
In August 2020, sushi technology in the field of personal health care completed the pre IPO round financing with a scale of 175 million yuan. Honghui capital was one of the investors. The decisive action of sushi technology can be traced back to the team's deep cultivation in the field of oral care.
Honghui capital is the largest institutional investor of Malong dental department. The team saw the market demand of electric toothbrush and tooth punch in oral care scene. Compared with going to the hospital to fill and extract teeth after tooth problems, daily oral care is obviously a higher probability event.
Based on the same logic, Honghui capital also extends its investment antenna to children's consumption scene.
Honghui capital is the earliest institutional investor of children's medical projects such as yuxueyuan and Xiaobai rabbit's oral cavity. In recent years, Honghui capital has carried out layout in the fields of children's consumption, such as diapers and probiotics. Of course, the consumers of probiotics are not limited to children. Just as sushi technology's products also include hair dryers and other "non oral" products, all excellent enterprises are relying on their own advantages to expand the extension.
Discover and cultivate a new generation of pitchers
This interview was conducted in Shanghai Office of Honghui capital. There is a 2015 magazine cover hanging on the wall of the conference room, and the current protagonist is the founder of three new venture capital forces.
When it was a new force of venture capital, the media described Honghui capital as "medical investment fund". In the past six years, the management scale of Honghui capital is nearly 8 times of that at the beginning of its establishment. After upgrading, the two major investment routes are biomedicine and health consumption. While consolidating serious biomedicine, the team is embracing all aspects of a healthy life.
"Before 2013, did you know them? But in earlier years, these people have made good deals in institutions. " He said, looking at the picture taken many years ago. Wang Hui believes that as long as the decision-making mechanism is scientific enough and the working methods are constantly iterative, it is natural to expand the investment field. In the process of development, what really tests an investment institution is the ability of a team to cultivate excellent investors on the premise of adhering to the principle for a long time.
Since 2019, one of the great significance of the internal reform of Honghui capital is to promote the organization to maintain a selfless, open and humble mind, accept new thinking, recruit and cultivate excellent people, put people suitable for the future in a position to play, and let different opinions be heard.
Looking back at the growth of successful large-scale funds, we can find that their starting points are mostly private equity and venture capital, and they are mostly concentrated in a certain stage or industry. After years of practice, they have been moving towards diversified alternative asset management. Moreover, they have constantly cultivated cadres. These ordinary and distinctive team members have organically combined to create extraordinary performance , each other.
In the growth sample of Honghui capital, the team achieved a breakthrough in the field of large consumption while consolidating the base area in the field of serious biomedicine.
"A fund is a fund, which continuously creates value under the guidance of strategy and within the framework of its work." Wang Hui said, "most of the starting points of any company are the strengths of the founders. However, no one and any organization should not lose the will to change and expand because of its advantages and characteristics. "
In fund management, he didn't intend to set limits on the future of the team.