In the “Big Assets Management Era”, Private Equity Rises as a New Force 

In recent years, as the barriers to competition between various financial institutions were broken down one by one, China has entered a “Big Assets Management Era” of cross-boundary competition and multi-industry operation for finance; as the multi-level capital market was perfected continually, private equity investment has become a new trend for asset allocation among High-Net-Worth people.

At the beginning of 2014, the introduction of the private fund registration policy let private funds formally come on to the stage, giving the big assets management era an imprint of “private placement”. According to statistics, in less than 2 years, the number of private funds grew by 3 times. A group of mature institutions with professional assets management ability stood out. Zhejiang Silicon Paradise Asset Management Group (hereinafter referred to as “TTGG”) is one of the typical representatives in Zhejiang’s local private equity community.

Open a Private Fund Custody Era, Explore the High-end Client Service Mechanism  
In Jun. 2006, Zhejiang TTGG Sunshine Venture Investment Co., Ltd. (hereinafter referred to as “Sunshine Fund’) was established, which marked TTGG’s transformation from a venture investor into a private fund manager. As the first corporate private fund to introduce the custodian bank mode in China, Sunshine Fund opened the “fund custody era” for TTGG and even the entire private equity industry. Today, the custodian bank system is still used by private equity institutions. It has become an essential content required by the Asset Management Association of China in filing fund products. Today, when they arrange fund custody with banks, many institutions still refer to TTGG Sunshine Fund’s custody agreement. Afterward, all TTGG funds introduced the preset custodian bank mechanism. Its responsible attitude toward investors and its strict control on the staff’s ethics have won large groups of high-net-worth investors’ trust.

Create Differentiated Core Competitiveness, Build a Time-Honored Assets Management Business 
From 2008, private equity funds managed by TTGG began to withdraw in succession. For its grasp of market opportunities, the company brought impressive returns to the investors, helped the clients’ assets leap from million-class to 10-million-class, and enhanced TTGG’s awareness and reputation in the industry. However, in the nationwide PE boom, TTGG gradually realized the age of great profits would end; the risks of long investment cycles and high evaluations would fall on the investors in the end, which is against TTGG’s dream to build a time-honored business. Therefore, its innovative gene once again inspired TTGG to create differentiated core competitive edges.

Diverse Asset Allocation Services 
In 2008, TTGG began to explore private placement funds outside traditional equity investment. In 2009, it tried local government platform-based financing projects to provide clients with fixed-income funds. In 2011, it established the first M&A fund “TTGG-Dakang” in China, not only pioneered M&D funds in the industry, but also opened a channel for withdrawal from projects in the IPO lockout period later. In 2012, it actively tried real estate funds, explored the share +debt fund mode. In 2013, taking the opportunity of changing its name, it took part in listed companies’ M&A and integration, developed car loans, enlending and other financial services, turned into the province’s first assets management group to be entrusted with assets management. In 2014, it initiated the value-creating increment-sharing new M&A pattern called “small shareholder”. In 2015, it helped investors grasp the opportunities in the reform of state-owned enterprises, regional industrial and economic transformation, successfully introduced external sunshine PE institutions in the bull market for a-share, launched secondary market funds, hedge funds and other innovative products, giving investors diverse choices. After years of practice, TTGG’s asset side has covered private equity funds, private placement funds, M&A funds, fixed-income funds, secondary-market funds, hedge funds, etc, preliminarily forming a diverse product system. In addition, the opening of the first “complete discretionary account” marked the company opened a new chapter for providing investors with professional asset allocation.

Professional Assets Management Services 
As one of the first equity investment institutions in China, after 16 years of trials and hardships, TTGG is well aware the core of client service is to provide professional assets management services, to meet clients’ different requirements on liquidity, profitability and safety, etc. However, services are provided to people in the end. TTGG has a professional efficient investment consultant team. Most of them have a high educational background, solid professional background, rich experience in assets management. But this marvelous team is not trained in one day. First, they need to learn investors’ asset allocation needs and rational expectations on the ROI, to give them advice about asset allocation on the basis of balancing the investment cycle, return and risks; next, they help investors find the quality asset side matching their demands. Different from other assets management institutions, TTGG’s professional investment consultants usually play the role of product managers. By taking part in product decision making, they understand each project’s situation in a more all-round and deeper way, and thus design reasonable product programs to provide investors with more real and valuable information. What’s more, investment consultants need to control asset allocation risks for clients. Outstanding investment consultants not only can gain higher returns for clients from a fund product. The product’s prospects and initiative are more praiseworthy. They give consideration to the investment cycle and risks at the same time, can furthest maintain and increase the value of assets for clients.    
     
TTGG’s clients are all high-net-worth individuals and institutions. Most of them began to really understand equity investment and asset allocation via TTGG. Many investors’ first investment was made via TTGG. From a smattering at the beginning to today’s penetrating insight, they finally formed their own investment ideas and styles. According to statistics, TTGG has provided investment services for more than 2,000 high-net-worth clients, including institutional clients, business clients, high-end individual clients, as well as invested enterprises’ partners, etc. To TTGG, professional assets management services not only help investors realize the appreciation of assets, but also help them grow into mature stable investors, form interdependent, win-win, benign interaction.

Convenient & Efficient Online Financial Services 
Though the product system already covered short, middle and long investment cycles, it still couldn’t meet investors’ demands for current and short-term financial products that mature within a year. In 2014, TTGG began to explore and develop internet finance. It established Hangzhou TTGG Internet Financial Service Co., Ltd. (hereinafter referred to as “TTGG Financial Service”). Depending on TTGG’s rich resources accumulated in financial fields over the years, by means of Internet technology, it provides high-net-worth clients with all-round asset allocation services. TTGG Financial Service not only is TTGG’s new exploration in the internet technology field, but also is an important carrier to realize effective online-offline linkage, further meet clients’ individualized needs and improve client experience. 

Put Clients First in Financial Investment, Seek the “Golden Key” to Assets Management 
At present, China is in a critical period of economic transition and upgrading. Private equity investment institutions play a positive role in supporting the multilevel capital market’s construction, the real economy’s transformation and upgrading, the people’s business and innovation boom. On the other hand, the absolute scale of the stock of capital in the society is still big. The number of high-net-worth clients who have financial assets worth more than one million is growing by 20% year on year. When the risk-free interest rate falls continuously, the private equity industry still has big space for development in matching the asset side and the debt side.

However, accompanied by the tests posed by the declining real economy, the capital market’s turmoil, the increasing competition in the mixed financial industry, the private equity investment industry also will face differentiation and transformation. To private equity, a good reputation and brand image make a huge intangible asset forever. But it must be accumulated day by day from people-oriented client services. Only professional institutions that concentrate on maintaining and increasing investors’ wealth, focus on their strong suits, make efforts to create differentiated core competitiveness, have been tested by the market and investors for a long time, can realize sustainable development in the big assets management era, really become trustworthy and respectable assets management institutions. 
 
 (Source: Aug. Issue of Zheshang Financiers)