CVCA AGM 2012 Review Page

中文

CVCA Annual General Meeting (AGM) 2012 was held in Beijing on December 7. Around 200 senior professionals from member companies attended the event.

Yichen ZHANG, CVCA Chairman, CEO of CITIC Capital delivered the welcome speech. Maurice HOO, CVCA legal counsel, Partner of Orrick, Herrington & Sutcliffe, announced the newly-elected governors. Frank TANG, CVCA CFO, CEO / Managing Partner of FountainVest Partners, presented the Annual Financial statement. Sing WANG, CVCA Industry Policy Committee (IPC) Chairman, Partner / Co-Chairman of TPG Greater China, Head of TPG Growth North Asia, reported the work of IPC in the past year.

The chairmanship handover ceremony was held at the AGM. Chairman Yichen ZHANG handed a Marble Pillar (Huabiao) shaped trophy, which symbolizes direction pointing, democracy, wisdom and efforts pooling, to Chairman Elect John ZHAO. Yichen ZHANG recalled his four-year chairman term in his speech.

He said the VC/PE industry has developed rapidly during the past four years and currently is facing challenges. “When the going gets tough, the tough get going.” He expected John Zhao would lead CVCA to progress further with constant mission and responsibilities to the industry in the new phase. In his inaugural address, John ZHAO deemed the economic and market changes as an opportunity for the industry to return to rationale. Given the VC/PE industry has been solidly ensured to be an important and fast growing part of China's multi-level capital market nowadays, returning to rationale would be good for the industry's long-term healthy development. Under the current economic and market circumstances, CVCA's role as a self-disciplined, responsible, professional industry association would be more highlighted. He looked forward to providing state-of-the-art services to members and hoped that professionals would pool their wisdom and efforts to develop businesses and make contribution to the industry on the platform of CVCA.

In 2012, the VC/PE industry is faced with transitions and adjustments through fundraising, investing, post investment management, and exit. The on-site e-polling survey at the AGM showed that fundraising and exit are the biggest headaches; few LPs defaulted on their commitment and transferred their positions in GPs in China in the past year; the intention to set up a new USD fund in 2013 became weak; 52% of the participants plan to set up RMB funds in the coming year; early stage investing is the most attractive; over 70% of participants are optimistic about the investment opportunity of China's market in 2013. On the basis of the survey results, panelists and the participants made in-depth discussions in six dialogue sessions on the challenges and opportunities of VC/PE industry while reviewing 2012 and forecasting 2013.

CVCA Chairmanship Handover Ceremony		Welcome speech by Mr. Yichen ZHANG,CVCA Chairman / CEO of CITIC Capital		Annual governor election announced by Mr. Maurice HOO, CVCA legal counsel/Partner of Orrick, Herrington & Sutcliffe
Annual Financial Statements presented by Mr. Frank TANG, CVCA CFO / CEO and Managing Partner, FountainVest Partners		IPC's Annual Report by Sing WANG, IPC Chairman / Partner, Co-Chairman, TPG Greater China,Head of TPG Growth North Asia		Ms.Crystal SUI, CVCA President, hosted the Annual General Meeting

Yichen ZHANG, CEO of CITIC Capital, moderated the dialogue I: What PE to do with their China strategic planning in downturn. Antony LEUNG, Senior Managing Director / The Blackstone Group Chairman of Blackstone Greater China, Hugo SHONG, Founding Partner of IDG Capital Partners, and Andrew YAN, Managing Partner of SAIF Partners joined the dialogue. They made comments on the recent changes and adjustments in fundraising, investing, portfolio management and exit from different perspectives. Based on the overall economic downturn, the industry slowdown, and more challenges in the portfolio management, some of them felt a bit pessimistic about the next few years' prospects on the investment opportunities in China's market. However, the optimists deemed the economic condition as an opportunity for a counter-cyclical investment which might rise when markets fall, given the valuation would tend to be more reasonable; on the other hand, the global capital liquidity ensured the fund source.

Dialogue II: Exit Channel Selection was moderated by Frank Tang, CEO and Managing Partner of FountainVest Partners. Stephanie HUI, Partner and Managing Director in Principal Investment Area of Goldman Sachs, Duane KUANG, Founding Managing Partner of Qiming Venture Partners, and Weiguo MA, Partner and Managing Director of Cowin Venture Capital joined in the panel. Their biggest concerns include the policy uncertainty, volatile domestic capital market valuation, and etc. IPO in the US is still an important exit channel. Dialogue guests felt optimistic about China-concept stocks in a long-term. They also exchanges views and opinions with other attendees on the H share liquidity, M&A exits, and etc..

Sing WANG, Partner / Co-Chairman of TPG Greater China and Head of TPG Growth North Asia moderated the Dialogue III: China's PE/VC industry policy. Lorna CHEN, Partner of Global Asset Management Group of Shearman & Sterling, Jennifer QIN, Lead Partner of Investment Management of Deloitte Asia Pacific, and Roman SHAW, Managing Partner of DT Capital Partners joined the dialogue. Their discussions range from role of government administrations, industry regulations to taxation policies on partners and partnership businesses, and VIE structure. They expected CVCA could be more active in playing a role in the communication with policy makers to promote a sound environment for the industry.

Dialogue IV: The fundraising patterns and prospect in China's VC/PE market was moderated by Leenong LI, Managing Director of Commonfund Capital. The Panelists include Christopher Hunter, Managing Director of Cambridge Associates Investment Consultancy, Piau-Voon WANG, Partner of AdamsStreet Partners, and Disheng YING, General Manager of Division Four of PDSTI. Their discussions were focused on the changes and adjustments of international LPs' asset allocation strategy in China's market; China's pros and cons compared to other emerging markets; the cyclical changes of RMB and USD fundraising environment in the next few years as well as the correspondent adjustments of LP's strategy. The panelists hoped that GPs could maintain communications with LPs in a timely, honest, transparent, and constant manner.

Baoma WEN, Partner of Capital Today Group, moderated Dialogue V: Value added services and portfolio management. Nengguang WANG, Founding Partner/CFO of Legend Capital, Shirley XIE, Partner of PwC, Lei YANG, Managing Director of Northern Light joined the panel. With practical experience, they explained various value added services ranging from investees' branding and image promotion, entrepreneurs' mindset changing, to facilitating the management with corporate governance, incentive mechanism, marketing, and talent retention. They also exchanges opinions and experience on how investors cope with conflicts of interest with entrepreneurs.

The last dialogue: Role of professional service providers in portfolio risk management was among Weichou SU, Partner of StepStone, Chen BAO, Partner of FangDa Partners, Henry HUANG, Executive Director of Finance Department of Goldstone Investment Ltd., and Jeffrey SUN, Partner of Orrick Herrington & Sutcliffe. With first-hand due diligence practical experience, they analyzed the challenges and countermeasures of domestic enterprises' fraud risk; the developing trend of USD and RMB FoF in China; the necessity and concerns of GP reporting management outsourcing services, etc..

In addition to the communications among dialogue guests, each dialogue went with real-time interaction with the floor, making the whole AGM a huge discussion platform.

Besides, CVCA hosted an LP/GP roundtable and dinner in Beijing on December 6, 2012. At the roundtable meeting, CVCA governors communicated with senior professionals from more than 20 international and domestic LPs about the international LPs and domestic LPs' criteria on GP selection; how to build up mutual trust in the cooperation between LPs and GPs; the opinions to the management fee and co-investment, etc.. All participants look forward to more communications and gatherings in the coming year.

CVCA AGM is an annual closed-door, member-only event where CVCA members and guests exchange views on issues and trend of common interest in an interactive, focused and foot on the ground manner.