china's 100 billion internet investment fund was established. whose brand should the national team capital "dad" turn?

Posted by millikan at 2020-04-14

The Internet industry ushered in the entry of national team investment funds. On January 22, China Internet investment fund (hereinafter referred to as CNIC) was established, which was jointly initiated by CNIC and the Ministry of Finance and approved by the State Council. The total planned size of the fund of CNIC is 100 billion yuan, and the first 30 billion yuan has been fully subscribed.

The news caused quite a stir in the Internet industry. In the past year, network management and control in various industries tend to tighten (just yesterday, the Ministry of industry and information technology issued a notice: no VPN can be built or rented without approval). Now, the national team comes in steel armor, what does it do? Why come now? Who is its fund manager? No one knows.

In the news release issued by Xinhuanet, there is a saying like this:

The establishment of China's Internet investment fund is a concrete practice to implement the new development concept and a powerful measure to promote the implementation of the network power strategy. China Internet investment fund will adhere to the investment concept of "focusing on specialty, guiding, supporting, sharing and win-win", adhere to the national strategic orientation, market-oriented operation and professional management, focus on the key areas of Internet, support the innovation and development of Internet through market-oriented way, help excellent Internet enterprises, serve the strategy of network power, and promote the better benefits of Internet The state and the people.

Nowadays, the Internet has become an important infrastructure construction as hydropower and coal, so it's reasonable for the national team to do so - the state-owned economy should control the lifeline of the national economy, mainly in the control of important industries and key areas.

Up to now, the national team wants to penetrate into the Internet related fields by means of industrial investment and equity participation, indicating that the national strategy is seeking to integrate with market behavior.

It is also a financial investment. After CIC, China netinvestment is to build a Temasek in the Internet field? There are several points worth emphasizing:

1. Although all of them are "state" money, CIC and Singapore Temasek are state sovereign funds. In addition to the money from the central finance, CIC also has many other state-owned capital to participate. So, Temasek began to disclose its performance year by year since 2005 (because after all, it is the money of the state and the whole people, so we need to increase transparency). What about China netcast? Will it follow more market logic or political logic? (GIC, another sovereign fund in Singapore, is more conservative than Temasek.) how is the balance between the two routes?

2. It is not clear who is the fund manager of this "rich and powerful" national team. In addition to capital strength, the most important thing for a fund is its management team. Even when CIC announced its establishment, it also had a well-known chairman. At present, CIC has not disclosed the names of its principals and management team. It seems that the announcement of the establishment news was a bit hasty? Is the core team still being formed? Will there be any stars in the VC industry in the future? In the case of unclear core management team, the national finance and major state-owned assets will lose 30 billion yuan, which is really a big boss can brush this face.

3. Will the entry of this fund boost the IPO trend in the next two years? Do you want to take advantage of this trend?

4. What will be the main investment direction? What are the areas where companies are most likely to be branded by this capital tycoon? Good institutions have pointed the way out for it. According to an interview with analysts in the Securities Daily,

We will focus on industries where technological breakthroughs are expected to achieve large-scale commercial use and market demand is expected to grow with certainty.

Optimistic about the field of information security: the network security law has been promulgated, industrial control security and other protection systems are coming out, and the industry growth rate will increase in 2017;

Optimistic about the field of Internet Finance: this field is mainly for long-term customers, with an urgent demand for loans and financial management, favorable policies for credit, consumer finance and other fields, and big data, artificial intelligence and other technologies to promote the development of the industry;

Optimistic about the field of artificial intelligence: voice recognition, image recognition and other technologies have made breakthrough progress, and relevant city companies in the industry will usher in development opportunities.

5. The vast majority of the dividends of China's Internet development in the first 20 years have been absorbed by foreign capital. In the past two years, Internet companies have taken turns to dismantle vies to go back to China for listing. The entry of this national team will further remove obstacles for some high-quality Internet companies (listed or unlisted) to return to their home country's capital market, which is positive for Chinese companies.

The following are some specific analysis of tiger sniffing benchmarking Temasek's investment in China open.

The combination of national strategy and market behavior

According to, the fund investment structure of CNIC includes the central financial guidance fund and six strategic investors, specifically the industrial capital represented by China Mobile, China Telecom, China Unicom and CITIC Guoan, and the financial capital represented by industrial and Commercial Bank of China and China post insurance.

Among them, the industrial and Commercial Bank of China has invested 10 billion yuan strategically, and is the largest single strategic investor. If estimated according to the amount of capital contribution given by ICBC, the central financial guidance fund is likely to be close to half of the capital composition of China netcast.

In addition to the financing scale of 100 billion yuan, CNIC investment enterprises will also receive 150 billion yuan of bank credit from ICBC, CDB and ABC.

According to an interview with, the head of China investment network disclosed (name not disclosed in the report) that the investment direction of China investment network is those enterprises that conform to the national strategy, have great development potential and good growth.

The investment decision-making is mainly guided by the following three directions:

First, adhere to the national strategic orientation. The first task is to promote the implementation of the network power strategy, and cultivate and expand Internet enterprises through the market-oriented way.

Second, adhere to market-oriented operation. According to the modern enterprise system, the organizational structure is built, and the ownership, management right and trusteeship right are separated from each other.

Third, adhere to professional management. Establish a professional investment and operation team, establish a sound investment decision-making mechanism, build a scientific risk prevention and control system, and focus on professional investment and operation.

What CNIC pursues is the combination of national capital and market-oriented operation, which is an attempt to integrate national strategy and market behavior in the field of Internet. To be sure, the father of the national team turned over the brand of an enterprise, which should be very strong support.

Will China open be Temasek?

When it comes to government investment, Temasek Holdings, a company founded in 1974 and 100% controlled by Singapore's Ministry of finance, is the first one to think about.

According to the figures published on Temasek's official website, as of March 31, 2016, the total return of shareholders in one-year period calculated by SGD was negative 9.02%, 3.25% in three-year period, 6% in 10-year period and 6% in 20-year period. Singapore's 20-year annualized core inflation rate is less than 2%.

Temasek data, 40 year total return on shareholders of 15%, I have to say that the sovereign wealth fund's investment performance is not inferior to some institutional funds.

Different from the Internet oriented investment direction of CNIC, Temasek has a wide range of investment fields, such as shares in Alibaba, Bank of China, China Construction Bank and Ping An in the fields of telecommunications, media and technology.

Temasek should be a model of market-oriented operation of state-owned capital. In terms of return on shareholders' investment, Temasek plays a role in maintaining and increasing the value of state-owned capital. From the perspective of investment industry, it is also involved in finance, transportation, communication, energy and other industries with high influence on the national economy through industrial investment, equity participation and holding. This should be a "Singapore style state-owned economy".

As a government-oriented investment, Temasek is undoubtedly a successful case, which proves that state-owned capital can guarantee efficiency and profits under a perfect company system. Today, Temasek is also a very international investment institution, with 29% of the companies invested in Singapore and the rest in other Asian countries and North America.

However, the establishment of Temasek also has its background. In the 1970s and 1980s, Singapore needed a lot of funds to develop large-scale industrial projects. At that time, Singapore's economic foundation was weak, and its private capital accumulation was insufficient. Many industrial projects needed state-owned capital.

However, the history of China's Internet development is closely related to capital. Since 1996, when Zhang Chaoyang returned to China with Professor Robert's venture capital to establish the company, the development of China's Internet companies has been strongly supported by capital.

In bat, baidu received multiple rounds of financing from the US investment fund Defarge before going public, Alibaba received investment from Yahoo and Softbank in the early stage, Tencent received risk investment from IDG and PCCW in the early stage, etc.

The history of China's Internet development is the growth history of China's capital investment. At this stage, investors often say that they can't find the outlet, don't know what to invest, and rarely hear that they can't find the fund.

So is it clear that the national investment fund will enter the Internet field at this time?

Which industries are both Internet and national strategy

When I was in middle school, the political book stated that the state-owned capital should control the lifeline of the national economy, mainly in the control of important industries and key areas.

In the past, these key areas include banks, railways, electricity, etc. now, they should include the Internet or some subdivision areas of the Internet, such as the Internet of things, big data, cloud computing, artificial intelligence, etc.

Take the smart city as an example. This kind of technology combines big data, cloud computing, artificial intelligence and other related technologies to "manage" the city by combining the relevant data of the city operation with the algorithm.

For example, through the traffic camera to collect the data of urban road operation, analyze and exchange the data, use artificial intelligence technology to analyze the data, and then use the corresponding results to allocate public resources.

When Internet related technologies become the support of the city brain, and the national team is not involved in it, is that very heartfelt, saying good Chinese characteristics, saying good national security.

If the Internet is further away from infrastructure such as hydropower and coal, it means that it is closer to the management radius of the father entering the national team.

Moreover, in the fields of artificial intelligence, big data and cloud computing, the development of some basic disciplines is needed as technical support. For example, basic theoretical and technical research such as brain like research, which is time-consuming and expensive, needs the participation of national team funds.

In an interview with Xinhua news agency, the head of Chinanet investment said that the company invested by Chinanet should conform to the national strategy and represent the leading scientific and technological achievements and development trend of the industry.

Which industries are in line with the national strategy? Take a look at the new trend named in the 13th five year national strategic emerging industry development plan, including modern agriculture, smart energy, inclusive finance, people friendly services, efficient logistics, e-commerce, convenient transportation, artificial intelligence, etc.

For example, we should build and promote the business model and business model innovation based on cloud computing, promote the construction of public cloud and industry cloud platforms, build the government data sharing and exchange platform and data open platform, build the national spatial infrastructure with remote sensing, communication and navigation satellites as the core, promote the integration of three networks, and build the industrial robot industry system

Take a look at the ministries and commissions on the China Internet investment conference: the national development and Reform Commission, the Ministry of science and technology, the Ministry of industry and information technology, the state owned assets supervision and Administration Commission, the State Administration for Industry and commerce, the CSRC and other relevant ministries and commissions. With the support of so many national ministries, CNIC can mobilize more national resources than Temasek Holdings.

Many analysts believe that Temasek's success lies in the successful establishment of a perfect company system and the guarantee of the efficiency and profit of state-owned capital. It is obvious that as an investment fund with "people on top", some institutional investment funds are embarrassed not to play with Chinanet. Therefore, the changes that Chinanet investment with abundant capital and resources can bring to the development of China's Internet, whether positive or negative, are worthy of continuous observation.