Source: market capitalization Fengyun
Generally speaking, my company runs well and will not seek a merger in a short period of time.
On May 22, the news of the merger of two well-known private equity Zhengxin Valley Capital and Runshi Private Placement attracted market attention.
On the same day on the social platform, Zhengxin Valley Capital announced that it would start the integration with Shanghai Runshi Private Equity in the near future. After the completion of the integration, Lei Ming, founder of Shanghai Runshi Private Equity, will join Zhengxin Valley Capital as a partner and investment director, while Runshi Private Equity Fund's existing business and team members will join.
(source: public information on the Internet)
Zhengxin Valley Capital is a relatively well-known investment institution in the industry, which is subdivided into Zhengxin Valley Venture Capital and Zhengxin Valley Private placement, both of which are called Zhengxin Valley Capital.
The former focuses on the primary market and investsSeagames1993Star companies such as Byte, bilibili, China New Airlines, and the latter focus on private investment in the secondary market, with a current management scale of more than 10 billion yuan. This time, Lei Ming joined Zhengxin Valley Private Equity and served as a partner and investment director.
What seems to be a combination of strong and strong forces, but in fact they keep warm together?
According to public data, Lin Lijun, founder of Zhengxin Valley Capital, served as general manager of Huidianfu Fund from May 2004 to April 2015. In June 2015, Lin Lijun founded Shanghai Zhengxin Valley Investment.
Lei Ming joined the Huidianfu Fund in 2007. In August 2022, Lei Ming also founded Shanghai Runshi Private Equity and worked as a fund manager.
According to Choice data, Lei Ming achieved great success as a fund manager at Huitianfu Fund, with the highest return of 371.Seagames1993.5%, the CSI 300 index rose 127.6% over the same period. Most of its products have an annualized return of about 20%. At the same time, Lei Ming also served as the investment manager of the national social security fund portfolio, with a total management scale of nearly 30 billion yuan.
(source: Choice data)
Lei Ming and Lin Lijun have worked together for many years and have the same work experience and "public and private" experience. The thunder joining Zhengxin Valley Capital can be seen as a combination of strong and powerful, and may have something to do with the limitations of small private placement.
(source: official website of the China Foundation Association)
The guidelines for the Operation of Private Securities Investment funds issued by the China Foundation Association on April 30 this year cover two major points for small private placement: the minimum survival size is reduced to 5 million yuan, it is clear that funds with a scale of less than 5 million yuan for a long time should stop applying and if the net asset value of the fund is still less than 5 million yuan for 120 consecutive trading days after stopping the purchase, it should enter the liquidation procedure.
The above two rules undoubtedly add more pressure to the small private placement with limited fund-raising ability when the market is not as expected.
Therefore, "merger" may become a new trend in the private equity industry, as early as 2020, the private equity industry appeared the first case of manager merger. According to public information, in 2020, Xingju Investment completed the merger with Shanghai Rui County assets, the actual controller of Xingju Investment was changed from Wang Xiaoming to Rui County assets, and Wang Xiaoming served as Chief Investment Officer of Rui County assets.
With the Matthew effect of private equity fund industry becoming more and more prominent, the disadvantages of small and medium-sized private equity in raising funds, investing in research and attracting talents are becoming more and more obvious. Merger may be one of the important ways for small and medium-sized private equity to break the situation.
Looking for a merger or a way out?
In addition, the merger may be a better way for fund managers to face performance pressure after "public and private".
For example, both Lin Lijun and Lei Ming have worked in public funds, and although their performance is not convenient to show after "public and private", on the whole, most "public and private" fund managers have had a hard time in recent years.
In the past decade, at least 300 public fund managers have completed the "public-private" transformation by setting up private equity funds or joining private equity funds. According to private placement network data, of the 328 private fund managers with public offering background and performance presentation, only 84 have positive performance in the past year, accounting for 25.6%.
When the time dimension is lengthened, the fund managers of "public and private" have also failed to get better returns: the average return in the past month is 8.44%, the average return in March is-4.10%, the average return in the past half year is-6.25%, and the average return in the past year is-11.29%. The average return in the past three years is-9.06%.
The poor performance after "public and private" is mostly due to the general pressure on the market or the inability of fund managers to match the market, but for small-scale fund managers, the main reason is more likely to be the decline of investment and research resources after breaking away from the original public offering fund platform, and it is difficult for small teams to support the demand for investment and research.
For example, the Shanghai Runshi Private Equity Fund established by Lei Ming has seven registered regular employees, excluding compliance, supervisors, risk control and other three people, then there are only four researchers who can fully carry out research in the field of investment and research.
(source: public information on the Internet)
According to the data of the private placement network, 17 of the 19 products of Shanghai Runshi private equity funds included in the platoon network are running, and all of them belong to stock strategy products. On average, each researcher is responsible for 4 stock strategy products, which poses a great test to their professionalism.
(source: private placement network)
Lei Ming's situation may be the epitome of many small and medium-sized private equity fund managers after "public and private". Under the circumstances that the performance is not convenient to display and the ability to invest in research is facing a severe test, whether this "merger" belongs to the combination of strong and strong. Or you have to put a big question mark.
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