Does the IPO smell good?Warburg Pincus investment holding five years “bumper harvest”, Warburg fund or into a domestic company

2022-06-11 0 By

Recently, The application of Huabao Fund to change more than 5% of its equity has received feedback from the CSRC for the first time.Judging from the development of Warburg Fund in recent years, it is obvious that the equity transferor Warburg Pincus has caught up with the good times. After holding for five years, the scale of Warburg Fund management has been increasing and its profitability has also been increasing.If the deal goes through, Warburg will become a domestic public fund company and the second of the first four joint-venture fund companies to do so, following China Merchants Fund.In the comments, Warburg Pincus, as the transferor of the equity, was asked to supplement its investment strategy and objectives in the public fund industry.On August 1, 2017, Warburg Pincus and the then Warburg Industrial Fund announced that the former would strategically invest 49 percent of warburg Industrial Fund and had received approval from the China Securities Regulatory Commission.Founded in 1966, Warburg Pincus focuses on growth investments and has invested more than us $97 billion in more than 960 companies in more than 40 countries, according to its website.It started to invest in China in 1994, and in recent years, it has also established its presence in the financial industry, among which typical projects include Warburg Fund, Ant Group and Zhongyuan Consumer Finance.Warburg Was one of China’s first sino-foreign fund ventures, originally 51 per cent owned by Warburg Trust (98 per cent owned by Baosteel) and 49 per cent owned by Societe Generale asset Management.In December 2010, SocGen Asset transferred its entire 49 per cent stake to Lead Asset.Whereas Lead Asset, like Socgen Asset, is a wholly owned subsidiary of Societe Generale Group.So the “Xingye” in the name of the Warburg Fund was retained until Warburg Pincus took it over and renamed it Warburg Fund.As for strategic investment in Warburg Fund, Zhou Lang, partner of Warburg Pincus, said warburg will provide global resources and expertise in strategic planning, product development, fintech and other aspects.In the review process of the Ministry of Commerce, the acquisition case was treated as a summary case.At that time, Zhou lang also said that China’s economy has experienced rapid growth for more than 30 years, and with the rapid accumulation of wealth of residents, their awareness of financial management and asset allocation has been constantly enhanced.Warburg Pincus firmly believes in the long-term development prospects of China’s asset management industry and public fund management industry, and the investment in Warburg Fund is an important layout of warburg Pincus’ strategic investment in China’s asset management industry.It is worth mentioning that warburg Pincus once speculated that it would increase its stake in Warburg fund when the ratio of foreign ownership was liberalized in the public offering industry.However, Zhou Lang told the media in October 2020 that Warburg Pincus will hold its investment in the Warburg fund for a long time, but will not consider increasing its stake for the time being.However, “long-term holding” soon took on a new twist.On April 21, 2021, the application materials for equity change of Warburg Fund were accepted by CSRC, and were corrected on April 27.In other words, the term “long-term hold” has become “obsolete” within six months.A senior industry insider told times weekly that warburg Pincus was required by regulators to supplement its investment strategy, not without a clear target.In April 2021, Warburg Pincus also submitted an application to establish a foreign equity securities company.”As details of the transaction have not yet been disclosed, there is a special message from the CSRC’s feedback that Warburg fund may become a domestic fund company in the future,” the senior industry insider said.For the equity transaction of the two shareholders, Huabao Fund replied to times weekly that the equity change is in the process of administrative approval, and the CSRC has accepted and given feedback. For other information, please refer to the company’s announcement.Although many details of the shareholding change have yet to emerge, Warburg Pincus has made a good deal.In terms of scale under management, The Warburg fund is not what it used to be.At the time of Warburg Pincus’ involvement, Warburg fund was still a fund company with a scale of just over 100 billion yuan.As of June 30, 2017, the total size of the company’s publicly offered assets under management is 122.5 billion yuan.But as of December 31, 2021, the total size of THE ETF owned by Warburg Fund alone has reached 215.959 billion yuan.Huang Xiaoyi, general manager of Warbo Fund, said in an interview that in the Internet digital era, active fundamental investment and quantitative index investment should complement each other.Warburg Fund always adheres to the development strategy driven by active investment and passive investment, and guides investors to make long-term investment and value investment.Although we do not know the investment income of Warburg Pincus in Warburg Fund, according to time Weekly reporters, the investment income of warburg Trust, a major shareholder, in Warburg Fund in recent years has obviously increased.In 2017, 2018, 2019 and 2020, its 51% Warburg Fund equity recorded investment income of 0.8 million yuan, 102 million yuan, 153 million yuan and 153 million yuan respectively.In other words, from a financial investment perspective, warburg pincus’s disposal of its Stake in Warburg could end up making a lot of money.