Programme Day 1
Registration and refreshments
China in 2020 and beyond: Achieving growth amid uncertainty
Slowing economic growth, trade tensions with the US, deteriorating consumer sentiment, and volatile capital markets. That was China for much of 2019 – but what about 2020? It remains to be seen whether Beijing intensifies stimulus efforts and whether these are quick fixes or broader reforms. This could leave PE investors in a bind: keen to participate in a long-term, consumption-driven growth story, but uncertain about their timing and mode of entry.
- What are the biggest risks for investors in China?
- Will there be more deals driven by stress and distress?
- What does China-US decoupling mean for private equity?
- How do you sell long-term opportunity in the face of short-term uncertainty?
A matter of control: Are buyouts coming of age?
Expectations of more buyout opportunities in China are based on well-known theses: succession planning, multinationals that get out when the going gets too tough, and founders who recognize they need help to reach the next level. But how long will it take for the trickle of deals to become a steady flow, and are private equity firms equipped to respond when this happens? Majority ownership necessitates a different set of capabilities.
- What does control mean in a China context?
- How do private equity firms source buyout deals?
- When will buyouts account for a larger portion of deal flow than growth capital?
- How do Chinese GPs stack up in terms of operational expertise?
The long game: Investing in SOE reform
The reform of China’s state-owned enterprises (SOEs) has been through numerous iterations, with private equity investors participating in different ways. The results have been hit and miss. For all the potential in consolidating and upgrading industries through the application of private sector expertise, shaking away bureaucratic cobwebs is difficult. As the latest initiative – mixed ownership reform – takes hold, there are renewed hopes that PE will find a way to work with SOEs.
- How is China progressing with mixed-ownership reform?
- Which industries are the most viable targets for private equity?
- Are local GPs better placed to win deals?
- What are the exit options for SOE investments?
Spending power: The evolving consumer opportunity
China’s consumer sector remains a tantalizing, $4.9 trillion opportunity, despite a fragility exposed by slower economic growth. The main challenge for private equity investors with an eye on long-term horizons is predicting when, where and how people will spend their money. Consumption patterns in China are dynamic and increasingly technology enabled. Behaviour is also geographically and demographically diverse, taking in everything from grandparents in top-tier cities to millennials in the hinterlands.
- What trends are driving investment activity?
- How do products and strategies differ for lower-tier cities?
- What role does technology play in value creation?
- How can GPs differentiate their consumer strategies?
China technology: At a tipping point?
If anything, China’s technology space is becoming more polarized. At one end of the spectrum, established unicorns continue to raise capital at elevated valuations from an array of investors. At the other, start-ups that were once in favour are falling out of it, with much talk of down rounds and dirty term sheets. Meanwhile, early-stage investors are bullish about an environment in which entrepreneurs are recalibrating their valuation expectation to a post-boom reality.
- What do China-US tensions mean for technology investment?
- How is the investor make-up in late-stage rounds evolving?
- Which is best for a China technology IPO – Hong Kong, Shanghai or New York?
- To what extent are VC firms contributing to value creation in China?
New ideas: Targeting frontier technologies
Artificial intelligence, big data, blockchain and 5G are among the most prominent examples of technologies with the power to redefine industry boundaries and business models. Their applications are wide ranging, from retail and healthcare to business services and manufacturing. Countless start-ups in these segments have attracted venture capital funding, which is pushing up valuations and barriers to entry. Where, then, should investors look for the next great technology breakthrough?
- Which industries will be most disrupted by technology over the next five years?
- How do investors track emerging themes in innovation?
- Is the emphasis shifting from consumer-facing to business-facing solutions?
- How should investors look to work with strategic partners?
Workshop: Best practices on fundraising
As another wave of Chinese managers look to launch US dollar-denominated funds, having previously only operated in the renminbi space, it is worth recalling the obstacles faced by their forbears. Perhaps the most important was failing to understand the needs of international LPs on strategy, terms and conditions, and structure. We have assembled a panel of experienced GPs, LPs and advisors to share best practices for preparation, pitch meetings, and diligence trips.
- Understanding the LP landscape
- Approaches to pre-marketing and marketing
- Lessons learned from successful pitches
- Working with placement agents and other intermediaries