As the equity investment industry enters a "tempering period" characterized by cognitive realignment and capability rebuilding, patient capital is increasingly becoming the core force underpinning technological innovation. Investment institutions are intensifying their focus on hard tech and strategic emerging industries, deepening their layouts and extracting value. Diversified exit and investment pathways are continuously expanding, accelerating the construction of a virtuous ecosystem centered on "investing early, investing small, and investing in technology." Government guidance funds and state-owned investment platforms have matured into "stabilizers" and "accelerators" for industrial development, collaborating with industrial players and various capital entities to build a deeply integrated, co-creating, and sharing industrial-financial ecosystem.
Marking the inaugural year of the 15th Five-Year Plan, TheCapital's 15th Annual China Capital Conference and Greater Hongqiao Science and Technology Investment Summit commenced at a pivotal moment. Centered on the theme "Tempering," the summit brought together government representatives, leading investment institutions, top economists, and industry-leading enterprises for in-depth dialogues at the start of the new year. Discussions revolved around investment trends, industrial development, and the frontiers of technological innovation, aiming to build an efficient industrial-financial ecosystem encompassing capital providers, investors, and enterprises, thereby promoting integration across the entire investment industry chain and value connectivity.
On the morning of January 13, 2026, the roundtable forum titled "[2026] New Investment Logic Amidst Technological Breakthroughs and Economic Transformation" commenced. Participants included Cao Yonggang, President of Hony Capital; Ji Wei, Founding Managing Partner of ChinaVision Capital; Wang Ge, Chairman & Managing Partner of CAS Investment; Wang Lin, Founding Partner of CDH Investments & Managing Partner of CDH VGC; and Ye Weigang, Founding Managing Partner of DT Capital Partners. The forum was moderated by Wang Zhixing, President of Wuxi Capital Investment.
The following content is compiled by TheCapital.
Wang Zhixing: Good morning, everyone! Welcome to the "[2026] New Investment Logic Amidst Technological Breakthroughs and Economic Transformation" forum. I am Wang Zhixing from Wuxi Capital Investment, your moderator for this session. Our five distinguished guests have long been deeply entrenched in the front lines of China's equity investment, demonstrating both a commitment to long-termism and a keen insight into cyclical and structural changes. Over the next hour, we will engage in profound exchanges on topics including institutional practices, technology investment directions, patient capital, and industrial upgrading. I believe this will be a substantial and insightful discussion.
First, let's begin with the opening topic. I invite each guest to briefly introduce their respective institutions in about two to three minutes. Let's start with Mr. Cao Yonggang, President of Hony Capital, to share Hony's institutional positioning and core investment advantages this year.
Cao Yonggang: Thank you, President Wang. It is both a pleasure and an honor to participate in this annual conference. Such occasions, bringing together various sectors of the industry to discuss the future development of sci-tech investment, are highly meaningful.
It is worth mentioning that Hony's Shanghai office is located in the Greater Hongqiao area. Our decisive move here from the Bund in Puxi was a response to the national call for "shifting from the virtual to the real economy" – transitioning from a finance-intensive district to one brimming with entrepreneurial vitality. Over the years, we have personally witnessed Greater Hongqiao becoming fertile ground for sci-tech investment.
Hony can be considered a "veteran" in the investment industry. The company was founded in 2003 and just celebrated its 23rd anniversary on January 3rd this year. Recently, we noted that the newly established national sci-tech fund has a 20-year cycle, and Hony's own development trajectory confirms that we embody such "patient capital." We have the confidence, patience, and determination to remain closely integrated with the upgrading iterations of China's national economy and real industries across different historical stages and economic cycles, steadfastly investing in China and believing in the nation's fortune.
Over the past two decades, Hony initially focused on mergers and acquisitions, concentrating on the PE end of equity investment, particularly control-stake investments in leading companies within mature industries. Building on this foundation, starting around 2013-2014, we gradually embarked on related diversification, extending our layout along different dimensions. On one hand, aligning with national policy direction and industry technology trends, we expanded forward into early-stage sci-tech investment, currently advancing through a combination of vertical funds and local government guidance funds. On the other hand, we maintain a sizable real estate investment business, focusing on the renewal and transformation of existing assets, converting old industrial spaces into parks suitable for startups and tech enterprises. We operate such parks in Shanghai's Zhangjiang, Jinqiao, Wujiaochang, and Hongqiao areas, hosting a large number of sci-tech companies.
Beyond primary market activities, we also have a public fund management team in Shanghai, hold a Type 149 license in Hong Kong focusing on cornerstone investments and capital market operations in Hong Kong stocks, and have a team continuously tracking developments in U.S. sci-tech innovation boards.
Overall, Hony has evolved into a comprehensive investment platform spanning primary and secondary markets, equity and real estate, and public and private offerings. Through diverse product forms, we maintain tight synergy, consistently revolving around technological progress and the overarching trend of national development.
That concludes the basic introduction of Hony. Thank you all.
Wang Zhixing: Next, I invite Ms. Ji Wei, Founding Managing Partner of ChinaVision Capital. ChinaVision has long focused on technology and innovative consumption, representing a highly emblematic firm among China's early and growth-stage investment institutions. Ms. Ji, in the current environment, does ChinaVision have a new understanding of the term "early-stage"? Please share with us.
Ji Wei: Thank you, President Wang, and thanks to TheCapital for the invitation. ChinaVision Capital was established in Singapore in 2008 and entered China in 2010, with its China headquarters located in Hongqiao. We have been working here for sixteen years; I personally live in Hongqiao, so I could be considered half a host today – welcome, everyone.
ChinaVision's development has mirrored the market's evolution from USD to RMB-denominated capital, and from market-driven funds being dominant to state-owned capital taking a leading role in recent years. Since its inception, ChinaVision's positioning has been "investing early and small," specializing as a VC firm leading Series A and B rounds, with over 90% of our projects being lead investments to date. We have cumulatively invested in over 300 companies, and among the 150+ companies currently under management, the vast majority were entered at relatively early stages.
Regarding the focus on "early-stage," our conviction has deepened particularly in recent years. In 2020, ChinaVision became one of the first batch of sub-fund management institutions selected for the National SME Development Fund, a policy that explicitly required "investing early, small, and in technology." Over the past five years, approximately 80% of our investments have concentrated on the early stage, with a key focus on hard tech sectors supported by the state. Currently, our investments are primarily concentrated in AI and related fields, with over 50% allocated to AI, embodied intelligence, underlying computing power, etc.
ChinaVision's distinctive characteristic lies in our roots from the internet era; hence, we maintain a dedicated team focused on the internet and cultural consumption sectors, without abandoning related layouts. In this domain, we focus on investments in new retail, emotional consumption, IP, etc., adopting more flexible approaches—not limited to early-stage investment but potentially involving deep participation through incubation, significant shareholding, or operational involvement.
In summary, ChinaVision's current investment focus is twofold: first, closely following national policy to layout hard tech tracks, which are gradually entering the harvest phase; second, persistently paying attention to consumption themes within China's vast population, an area we believe should never be overlooked. That covers the general development overview of ChinaVision in recent years. Thank you.
Wang Zhixing: Thank you. Next, let's welcome our third guest: Mr. Wang Ge, Chairman and Managing Partner of CAS Investment. CAS Investment is deeply linked to China's scientific research system, possessing unique characteristics in hard tech conversion and supporting national strategic scientific and technological strength. President Ge, please introduce CAS Investment's distinctive features and current layout.
Wang Ge: Thank you to TheCapital for the invitation, and I'm honored to exchange ideas and learn from everyone here.
CAS Investment, established in 2011, is a venture capital firm consistently focused on hard tech investment, having been deeply involved in the industry for fifteen years. We currently manage 11 funds with an AUM of approximately RMB 70 billion, overseeing a portfolio of over 180 companies, more than 20 of which are already listed or have passed listing reviews.
In terms of investment layout, we allocate 70% of capital to areas like artificial intelligence, semiconductors, and advanced manufacturing, while the remaining 30% is deployed in life sciences, including medical services, innovative drugs, and innovative medical devices, forming synergistic project clusters. Overall, our investments consistently align closely with strategic emerging industries, promoting the transfer and transformation of scientific and technological achievements, and empowering high-quality tech companies to grow and strengthen through capital infusion and industrial synergy.
That concludes the basic introduction of CAS Investment.
Wang Zhixing: Thank you. Next, I invite Mr. Wang Lin, Founding Partner of CDH Investments and Managing Partner of CDH VGC. CDH possesses profound long-term accumulation in China's private equity sector and is actively deploying in innovative growth directions through VGC.
President Wang, as a recognized "fundamental" institution in China's PE industry, how does this "dual structure" (parallel layout of traditional PE and VGC) benefit your investment judgment? Please share.
Wang Lin: CDH Investments was formally established in 2002, spinning off from CICC; if traced back to CICC's direct investment department, the team has been working together since 1995, spanning nearly three decades. If I were to describe CDH in one word, it would be "continuously evolving investors."
Our inception coincided with the vigorous development of China's consumer market. As the national economy progressed from basic sustenance to affluence, we invested in a series of consumer brands like Mengniu, Nanfu, Li-Ning, Belle, and Shuanghui. With national economic development and industrial shifts, our investment focus expanded from consumer goods to the internet, and now to hard tech, with strategies dynamically adjusting accordingly. It can be said that CDH's investment trajectory consistently echoes the main theme of China's industrial upgrading.
Currently, CDH's equity investments primarily focus on two major business segments: one is M&A investments deeply cultivating industrial value, and the other is the Innovation Growth Fund dedicated to forward-looking fields. The latter closely aligns with national strategy, emphasizing hard tech sectors like chips/semiconductors, aerospace/aviation, and artificial intelligence. For instance, we have invested in Loongson Technology, Galactic Energy, and in the AI field, deployed in representative companies like Zhiyuan Robotics and Xingdong纪元, while also nurturing a batch of high-growth excellent companies in areas like synthetic biology and new drug R&D.
Overall, CDH's investment direction has comprehensively shifted towards a hard tech-centric approach. We hope not only to ride the wave of the times but also to contribute to the growth of a cohort of high-quality enterprises, injecting an investor's strength into China's high-quality development. That concludes CDH's general introduction. Thank you!
Wang Zhixing: Thank you. Next, let's welcome our fifth guest, Mr. Ye Weigang, Founding Managing Partner of DT Capital Partners. DT Capital has long focused on technology and industrial investment, developing a distinct style in deep research within niche sectors. President Ye, please also share the current investment characteristics of DT Capital.
Ye Weigang: Thank you for the introduction, moderator. It's a pleasure to participate again in TheCapital's forum—this event held annually in early January has become an important bellwether for the industry. I recall discussions in previous years centered on surviving the capital winter, explaining DPI to LPs, and the need for more patience from capital. This year, the atmosphere in the venue is noticeably different, which is gratifying.
DT Capital is a market-driven investment institution headquartered in Shanghai, established in 2010. From the outset, we established a strategy of "investing in hard tech, investing early," predating related national policy advocacy by several years. It can be said we positioned ourselves early, awaiting the policy tailwind. Adhering to this direction for fifteen years hasn't been easy, but we have begun to reap results in recent years.
Within the "invest hard, invest early" framework, we primarily focus on three major tracks: semiconductors, artificial intelligence, and biopharmaceuticals, with particularly deep semiconductor penetration achieving early-stage investment across the entire industry chain. Years of persistence are paying off in the tech bull market since last year: in 2025, we had seven portfolio companies file for IPO, one of which successfully listed, with the remaining six expected to list successively in the first half of 2026. Additionally, several companies have entered the capital market via M&A, etc., resulting in favorable overall exit conditions.
Looking ahead to 2026, we have three main plans: First, continue adhering to "investing hard and early," particularly deepening and solidifying our presence in the semiconductor and AI fields we are already entrenched in. The semiconductor field has entered the "deep water zone," where easily solvable "bottleneck" issues are mostly overcome, leaving the tough nuts to crack. We will continue seeking excellent teams to jointly tackle these key technical challenges. Second, leveraging current market opportunities, promote more portfolio companies towards capital markets. This year's goal is to facilitate 8 to 10 companies filing for IPO and support several others in achieving capitalization through M&A, creating returns for LPs and laying the foundation for the fund's "raise-invest-manage-exit" virtuous cycle. Third, build and strengthen the early-stage hard tech investment ecosystem. As a market-driven private institution, we have long maintained sci-tech innovation cooperation with universities like Tsinghua University and Shanghai Jiao Tong University. This year, we plan to establish more formal, comprehensive, and in-depth strategic partnerships with at least one university, systematically promoting the transformation of scientific and technological achievements. While continuing to focus on semiconductors and AI, we will also moderately extend our layout to frontier areas like commercial aerospace, quantum computing, optical computing, and controlled nuclear fusion for exploratory research.
These are DT's key plans for this year, shared with everyone.
Wang Zhixing: Thank you, President Ye. Your sharing leads into our core topic: Looking ahead to 2026, what are your views on investment opportunities in the technology sector?
Over the past year, we've seen significant changes in tech narratives, capital logic, and even policy tools. Therefore, the second topic invites guests to share, based on their institutional practices, with fellow investors here and online: Where do you believe the main investment opportunities in the tech industry lie in 2026? Which directions will your institution prioritize? And what "pitfall avoidance" reminders are worth noting—for instance, regarding hotspots like large models, whether already deployed or not, should continued investment be pursued in the new year?
Let's start with President Cao.
Cao Yonggang: As several guests mentioned, from late last year to early this year, the mindset and spirit within the investment community have quietly shifted—the industry is showing signs of bottoming out and gradually warming up. At the year's start, the state introduced a series of heavyweight measures, including establishing sci-tech funds, vigorously advocating for patient capital. Simultaneously, technological innovation has entered a new phase; many areas once deemed unattainable or requiring lengthy cultivation are gradually becoming reality. The entire industry is moving towards a more active and invigorated state.
Certainly, regarding specific sectors, focus areas might highly overlap, with widespread optimism towards fields like AI, biopharmaceuticals, and genetic technologies that could bring breakthroughs to human health and existence. Hony is also prioritizing these areas.
Beyond the consensus on hotspots, we've developed several insights from our own practice: First, regarding the profound impact of AI. Although "no investment without AI" is almost a consensus, and companies emphasize their AI relevance, we must soberly recognize that we are still in an exploratory, even speculative, stage regarding how AI will change the world. Its disruptive potential might be faster, deeper, and broader than expected. Most current applications remain at the "+AI" stage—using AI as a tool to empower traditional models—while the future key may lie in "AI+," fundamentally restructuring industry paradigms based on native AI logic. This requires us, as investors, to possess more forward-looking vision and boldly envision future ecosystems. Second, while focusing on frontier tech, we should not overlook new opportunities inherent in traditional sectors. For example, AI development relies on computing power, which in turn depends on electricity supply; both links present investment opportunities capturable from a real asset perspective. Additionally, despite the current focus on hard tech, areas like consumption still hold potential. As Musk noted, AI might replace some jobs, freeing up more human time—potentially highlighting demand for experience economy, culture, and entertainment. Hony's long-term involvement in F&B, cultural media, etc., continues to reveal new opportunities there.
Overall, Hony's strategy is to use AI as a main thread, seeking quality opportunities across different value chain segments. We are confident in the market yet maintain reverence. As a new era dawns, past experience and cognition may require constant updating, even reconstruction.
Ji Wei: The past year was indeed very busy for the investment industry. Taking ChinaVision as an example, we invested in 34 projects last year, making 42 investments. In terms of deal count, as a medium-sized team, we hit a record high.
As President Cao said, "investing in tech" is an industry consensus. So, in the new year, how will our strategy under this consensus continue, and what differences might emerge? I share a few thoughts: First, for future sectors like AI, commercial aerospace, low-altitude economy, nuclear fusion, quantum computing, etc., the market has formed a strong consensus. Against this backdrop, we will be more resolute and daring in investing in early-stage projects this year. Early-stage projects inherently carry high uncertainty, often making specific application scenarios and commercialization paths unclear. However, our years of hard tech investment experience suggest that only by investing early can one truly capture the transformation outcomes brought by technological evolution. For instance, our project Tian Mou Xin, an integrated sensing-computing image processing chip incubated with Tsinghua's Brain-inspired Computing Research Center, was deeply involved from the scientist-entrepreneurship stage; another example is our very early investment in GPU company Biren Technology, which is now seeing harvests amid the recent industry IPO wave.
Our strategy is to approach tech investment from two angles: technological evolution and industrial ecology. Along the trajectory of technological evolution, ChinaVision will collaborate earlier with universities and research institutes, including Tsinghua, Zhejiang University, as well as overseas institutions like HKU, HKUST, and Nanyang Technological University, continuously mining early-stage conversion opportunities from research outcomes and leveraging our resources to assist commercialization. Currently, with policy support, accelerated import substitution, and capital market facilitation, the cycle from founding to growth for tech companies has significantly shortened. Therefore, on the "invest early, small, and in tech" front, we will more firmly intervene early and deeply empower scientist teams.
Second, from an industrial ecology perspective, whether embodied intelligence, low-altitude economy, or commercial aerospace, even if some sectors show signs of overheating, we believe they still possess medium-to-long-term growth space. I often categorize bubbles into two types: "bubbles" that burst upon touch, and "froth," like beer foam, which settles naturally, leaving the brew clearer and more robust. In long-term, promising sectors,阶段性泡沫 often belong to the latter. We have already invested in platform companies across several sectors and will extend upstream along the industrial chain, focusing on core components and precision manufacturing links like harmonic reducers, planetary roller screws, etc., where ample opportunities remain. Simultaneously, AI plays a huge role in enhancing efficiency across industries, so we monitor industry changes in the AI era. For example, while everyone knows computing power's importance for AI, the often-overlooked electricity determines AI's lower limit; compute-power synergy requires new energy storage systems as a foundation, bringing new opportunities to the energy sector.
Therefore, this year we will layout tech investments along two dimensions: first, following technological development trajectories, paying attention to frontier papers and university achievements for earlier-stage layouts; second, expanding upstream along invested industrial chains and into changes brought by AI.
Furthermore, I fully agree with President Cao's view that "the venture ecosystem isn't solely about tech." Our consumer team will also dedicate more effort this year. Against the backdrop of a stabilizing property market, a bullish stock market, ample household disposable income, coupled with the rise of new consumer cohorts and empowerment by AI and other technologies, many new opportunities are emerging in consumption, such as AI-empowered trendy toys and other innovative forms. In consumption investments, we will adopt more flexible and diverse tools and methods to support company growth, not viewing IPOs as the only path.
Overall, our investment pace this year will not be slower than last year, and early-stage investment capital in the market is relatively abundant. In an environment where corporate growth is traceable but valuations might outpace development, we prefer investing earlier. We will systematically advance our investment layout along the two main threads of technological development and industrial脉络.
Wang Lin: Regarding 2026 investment opportunities, I believe we are at a critical window where technology transitions from "architectural innovation" to "industrial implementation." AI, as a typical example, is universally discussed, even over-mentioned, but its true value is far from peaked. We are more concerned with: how does AI "take root and sprout" within实体产业, creating quantifiable, sustainable economic and social benefits? The core metrics boil down to systematic cost reduction, operational efficiency leaps, and fundamental improvements in end-user experience, i.e., bringing more convenience and enjoyment to life.
From a global competition perspective, catching up is still ongoing in AI's software and foundation model layers; but at the "software-hardware integrated" manufacturing and application layer, breakthroughs like DeepSeek are rapidly narrowing the gap, with China demonstrating structural advantages—we possess the world's most complete and responsive industrial and supply chains. It's not just a production tool but an "innovation accelerator." For example, while Boston Dynamics' robot dance videos were attention-grabbing, Chinese companies like Unitree and Zhiyuan Robotics excel in motion precision, engineering speed, and cost control. Take Zhiyuan Robotics, invested by CDH VGC; founded less than three years ago, it is already globally leading, fully demonstrating China's strong capability in manufacturing and rapid iteration, able to quickly transform technical ideas into stable products.
This "implementation capability" supported by the industrial chain can催生highly competitive business models. Talking about efficiency gains and cost savings, consider our investment in Neolix's unmanned logistics vehicles. Its technical path might not be the most cutting-edge, but it precisely targets the massive scenario of last-mile urban logistics, focusing on short-distance urban delivery, reducing logistics costs by 60%. In today's competitive market, such cost advantages are strategic. The company is now approved for operation in 309 cities, rapidly expanding its vehicle fleet, achieving cash flow breakeven, and beginning exports to markets like the Middle East. This validates the logic: leveraging China's manufacturing and supply chain advantages, success in the Chinese market equips one with the potential for global replication.
Beyond the AI-driven efficiency revolution, I'd like to spotlight a field not yet overheated but with immense potential: bio-manufacturing. While valuations in hard tech sectors like GPUs are high today, bio-manufacturing centered on synthetic biology is opening new value spaces by converging two technological inflection points: first, significantly reduced gene sequencing costs and improved efficiency, allowing deeper understanding of biological functions; second, maturing gene editing technologies enabling targeted modification of organisms to enhance production efficiency.
Our investment in "JiZe Biotech" is an example; they use synthetic biology to produce bear bile powder, with chemical composition similarity to natural bear bile powder reaching 97%, but at only 10% of the cost. This avoids harm to animals from traditional bile extraction methods and addresses ethical concerns and drug residue risks.
In summary, the future investment主线 lies, on one end, in utilizing enabling technologies like AI for "efficiency enhancement and transformation" of existing industries; on the other end, in embracing paradigm-shifting technologies like synthetic biology for "source-level reshaping" of traditional production methods. In the future, many substances reliant on plant/animal extraction or chemical synthesis may shift towards more precise, lower-carbon, and controllable "bio-manufacturing" models, potentially representing the next major industrial direction worthy of sustained attention.
Wang Zhixing: President Ye, any additions?
Ye Weigang: Thank you. The previous shares were excellent. I'll add from a different angle—building on the consensus on broad directions, I'd like to share thoughts on execution based on three phrases our team emphasized during year-end reviews.
We've always invested in hard tech, had some success last year, and hope to invest better this year. So, under the new dynamics—a hot capital market with abundant incoming capital, strong state policy support, and fierce peer competition—how do we find good opportunities and invest in good projects? I tasked the team to focus on three things for the year-end review: hone fundamental skills, maintain clear-headedness, and expand our network.
First, hone fundamental skills. Taking semiconductors as an example, solving "bottleneck" issues has reached the "mid-game" stage; easy parts are mostly overcome, leaving "hard bones" to chew. Judging which bone is worth chewing and who can chew it requires the team to delve deep into the industry. For instance, in EDA, full-flow digital circuit tools remain a短板; in equipment, lithography machines are mainly led by national teams, while CVD, PVD, etching have mature listed companies, with startup opportunities possibly in specialized equipment needed for emerging fields like photonic chips, quantum chips. Only by truly understanding technology and industry can one identify opportunities and evaluate teams.
Second, maintain clear-headedness. Consider the recent focus on large models. Previously, many peers thought startups couldn't compete with giants, offering limited investment opportunities; but with two related companies listing and surpassing hundred-billion market caps, market sentiment shifted noticeably. We remind the team not to be simply swayed by market sentiment but to冷静analyze: How is technological advantage translated into specific applications? Who ultimately pays? How far is the company from generating revenue and profit? Can commercialization be achieved within the fund cycle (typically 7+2 years)? What is the startup's core advantage compared to internet giants? Rational decisions require answering these questions.
Third, expand our network. We've always valued cooperation with universities and research institutes. A clear recent trend is the changing age profile of entrepreneurs: a decade ago, semiconductor entrepreneurs were often returnees with overseas big-tech experience, around our age; now, the average age of AI and large model entrepreneurs is under 35, with researchers in frontier fields like optical computing, quantum computing even younger. As industry "veterans," we must proactively engage with young scientists, learn from them, and encourage younger team members to interact deeply with peer entrepreneurs, thereby discovering emerging opportunities earlier.
In summary, seizing opportunities requires three things: hone fundamental skills, maintain clear-headedness, and expand our network.
Wang Zhixing: Thank you for the shares; I believe everyone present, like myself, found them highly beneficial.
Now, let's move to the third topic. This year's Central Economic Work Conference explicitly called for "cultivating patient capital," and the recently established National Venture Capital Guidance Fund has a 20-year cycle, explicitly directing 70% of capital to seed and startup stages. Under this policy backdrop, how should market-driven institutions balance policy guidance with investment returns?
I'd first like to invite President Ye, who has long been involved with policy-oriented and market-driven funds, to share: How should we understand the concept of "patient capital"? What does it truly take to execute patient capital well?
Ye Weigang: Patient capital is indeed a topic worth deep discussion. I've mentioned it several times at previous TheCapital conferences. Patient capital can roughly be divided into two types: "active patience" and "passive patience."
Previously, many private institutions were often in a state of "passive patience"—unable to exit projects as planned, forced to hold on, repeatedly explaining to LPs. Now, the state explicitly encourages "active patience" by establishing 20-year cycle funds, which is a clear policy direction. However, actual implementation still faces challenges.
I believe support is needed in at least two aspects: First, policy coordination. Policies from various ministries and across different stages need coordination to form synergy. Second, capital composition. Diverse types of capital need to participate jointly, especially for investments like "investing hard, early, and long-term," which require long-term capital support.
For instance, recent potential trillion-scale母基金 from NDRC, social security, etc., possess the patience and capability for 20-year investments. But a fund's capital sources are often not singular; they may include local government funds, private capital, etc. Local governments usually have re-investment requirements and are often reluctant to be the single largest LP; private capital often finds even 3 years long, let alone 20.
From a private institution's perspective, we are very willing to participate in "investing hard and early" and practice patient capital—whether active or passive. But to truly advance this, stronger supporting policies might be needed to attract various capitals to participate together.
As a private institution, we've spent significant effort in recent years coordinating different capitals, meeting various LP requirements, to integrate funds of different attributes within the same fund. The process wasn't easy, but we managed. We hope that with further state policy encouragement and improved supporting measures, we can more efficiently integrate resources, dedicating more energy to discovering quality early-stage projects and helping excellent entrepreneurial teams succeed.
Wang Zhixing: President Ge, your institution embodies both policy and market attributes. Drawing from experience incubating projects like Cambricon from CAS, rhythm management for hard tech projects is particularly crucial. Could you share, based on practice, how to balance policy guidance with investment returns?
Wang Ge: As fund managers, our core focus is achieving overall fund returns, not the success or failure of a single project. Therefore, during portfolio construction, we rationally allocate "defensive" and "offensive" projects, achieving structural balance of risk and return through portfolio strategy. Regarding project selection balancing national policy direction and market logic, our method is to use policy direction as a guide and market logic as the basis, seeking the "greatest common divisor" between them.
Taking chip investment in hard tech as an example, this field aligns with national strategic guidance and benefits from sustained investment in computing infrastructure, possessing clear market demand and payers—regardless of阶段性泡沫 in AI, genuine commercial payment scenarios exist now.同时, under the current more policy-oriented IPO environment, projects符合policy support and possessing technological leadership have more favorable listing channels. Such areas achieve dual alignment of policy and market, making them key sectors for focus.
For sectors that have gained industry heat, even showing signs of泡沫化, like controlled nuclear fusion, brain-computer interfaces, etc., we employ a phased layout strategy to match risk and return. Before valuation peaks arrive, considering the fund's lifespan, we achieve principal recovery and profit realization through timely partial exits of certain projects, thereby managing overall portfolio risk.
To summarize three points: First, practice asset allocation portfolio strategy throughout the entire fund investment cycle. Second, most crucially, in project selection, seek优质资产 where policy cycles, market cycles, and technology cycles converge, achieving triple alignment of policy adaptability, market feasibility, and technological maturity. Third, conduct全阶段布局 within the same sector, reasonably allocating investment proportions across early, growth, and mature stage projects to optimize return structure and risk distribution.
Wang Zhixing: Thank you, President Ge. President Cao, Hony has extensive experience in long-term capital layout and operations. Please share your perspective on this issue.
Cao Yonggang: Patient capital is undoubtedly a universal requirement set by the state for the industry, and national-level institutions leading by example is significant. But I want to emphasize the need for a comprehensive and accurate understanding of "patient capital's"内涵—patience does not mean "from start to finish," i.e., investing a sum in one company and holding for 20 years without movement. The essence of capital lies in流动, as "running water does not stagnate"; capital滞留in one place long-term isn't necessarily healthy.
The term "patient capital" is actually a reminder against the relatively浮躁investment风气prevalent in the industry recently. The enthusiastic market response to several high-profile IPOs is certainly positive, helping raise societal awareness of related fields and promoting resource and capital concentration. But as investment institutions, we must remain清醒, not treating such individual cases as the investment norm, nor expecting every project to deliver数百倍or thousand-fold returns in three to five years.
On the contrary, patient capital advocates a平常心and long-term perspective. Measuring investment布局over a 20-year cycle恰恰indicates the era of追求quick riches is over; we need to achieve returns in a more stable, solid manner. A better understanding might be that through layered接力of different forms and stages of capital, each contributing its resources逐步投入,共同accompanying enterprises from small growth to maturity,直至becoming industry leaders nationally or globally. We should understand patient capital from this angle. It恰恰raises higher requirements for our industry.
Wang Zhixing: Although the scheduled one-hour discussion time is up, allow me a few more minutes. For the final topic, let's adopt a more macro perspective: Against the backdrop of current economic transformation, how do you view the ecological changes in China's venture capital industry? This question is for Presidents Lin and Ji.
Wang Lin: I sense the venture ecosystem is continuously improving. Compared to widespread worry and anxiety last year, the overall atmosphere this year is markedly different.
First, from the capital supply side, liquidity sees positive signals. Attending a meeting in Hangzhou last weekend, I learned that several funds sized at RMB 50 billion from sources like social security have substantially materialized. This is like "the Three Gorges Reservoir starting to release water," significantly altering the entire capital ecology. I believe capital abundance will further improve in 2026.
Second, from the project side, we've entered a phase of technological explosion and widespread application, with quality projects continuously emerging. Personally, though over fifty, I still actively review projects frequently because I see many entrepreneurs' technical paths, product concepts, and business model innovations are inspiring. China's entrepreneurial vitality is endless; current entrepreneurs are mostly in their 20s-30s, even early 20s, providing abundant investment opportunities, with the number of high-quality targets increasing.
Third, from the exit side, although domestic listing mechanisms have certain导向性, as long as invested projects align with national industrial policy directions, there remains the possibility of growing strong and accessing capital markets relatively quickly. Under this mechanism, once "invited," it can often bring significant investment returns. Additionally, the Hong Kong market basically offers market-driven exits; although international department approvals have总量management, the mechanism is relatively flexible. Overall, domestic and international markets still provide diverse, viable exit pathways.
In summary, I believe this year's industry形势is明显优于last year and previous years. In the coming years, with strengthening national strength and continuous emergence of industrial opportunities, China's venture ecology will further improve.
Ji Wei: In the industry's trough years earlier, discussions often centered on confidence issues; "perseverance" and "pressure" were常态words. Now, industry discussions shift more towards strategy, which itself reflects cyclical transition and ecological回暖.
As President Wang said, current primary and secondary market conditions are favorable, policy support for the venture ecosystem and enterprises has significantly strengthened, and some historical issues like short fund lifespans, large-scale repurchases are evolving towards healthier, more sustainable directions under policy guidance. Therefore, whether from investor confidence or overall industry development, we are at a very positive juncture.
Of course, this doesn't mean problems don't exist. Many issues still require collective attention and推动. For instance, the recent discussion about industry ecology changes under state capital dominance. Some worry if state capital might crowd out market-driven funds? Personally, I view it more as良性竞合—various capital entities jointly supporting innovative enterprises actually helps enrich the market ecology and完善the support system.
Furthermore, I strongly agree with President Ge's point: judging by venture capital return patterns, funds established in the market's hottest years未必deliver the best returns. Therefore,如何在industry fluctuations maintaining rationality,把握rhythm, ensuring investment returns aren't adversely affected by overheating sentiment is a课题we must always清醒address.
Regardless of how diversified funding sources become or how varied LP demands are, as investment institutions, our core duty remains creating sustained, stable economic returns. Only by adhering to this fundamental can we better fulfill other functions and services. This must always be remembered.
Wang Zhixing: Thank you, everyone. Due to time constraints, this discussion concludes. Thank you to the five guests for their profound and practical insights, and to the live and online audience for their enthusiastic participation. This roundtable forum is now圆满closed. Thank you all!
Comments