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[Topic] promote private investment and to teach professional advantages inject funds into force tack

Date: 2020-03-26
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[Editor's note] compliance and trustworthy is the private equity industry must adhere to the bottom line, insurmountable red line, is the social responsibility of the industry to establish a society of high moral line. The former must enforce compliance, which should be encouraged to practice. The private equity industry is still in the early stages of development, but many organizations have started to show consciousness of social responsibility practice, played an important role in poverty alleviation. We firmly believe that actively practice social responsibility, the responsibility to carry out the investment at the core of sustainable development is the inevitable trend of the future sustainable development of the private equity industry health, but also the proper meaning.

February 10 began, 'China Fund News' weekly published special editions, analyze how private equity fund to support innovation, serve the real economy from different angles. Eleventh Edition feature article published on this 'carry forward the predominance of private equity fund specializing forces to get rid of poverty.'

Promote private professional advantage inject funds into force tackling poverty

China Securities Investment Fund Association

Since the party's 18, the State Council to poverty alleviation and development work into the 'five in one' overall layout and 'four comprehensive' strategic layout, attach great importance to the position of managing state affairs. Win tough fight poverty is one of the three big battle nineteen proposed by the party, it has great significance for building a moderately prosperous society as scheduled. 2017, Xi Jinping, general secretary of the National Financial Work Conference stressed the need to promote financial accurate poverty.

Our growth in the private sector under the socialist system with Chinese characteristics, along with the socialist market economic system and the gradual development of China's capital market, in the process of gradually expanding the service in the real economy. Continuing to improve service quality and efficiency of the real economy, support economic and social development in poor areas, promote the settlement of the problem of uneven development is not sufficient, both private industry practice practice early heart the mission, but also an important part of the cultural construction of a new era of private industry.

In practice, the private equity industry and give full play 'professional capital', 'patient capital', 'white capital' three major advantages, the initiative as a positive action, has become a force in national poverty reduction strategy for tackling service. In tackling poverty fight and win a crucial stage, the private equity industry in the industrial poverty, poor play professional financial functions, poverty alleviation in the electricity business, consumer Poverty Alleviation in practice social responsibility, pro-poor education, poor public release of the utmost good faith, strong support economic and social development in poor areas, poverty in the battle to win, to build a comprehensive well-off society in historical journey to show the power of the Fund.

Continue to increase investment in poverty alleviation

September 2016, the Commission issued 'China Securities Regulatory Commission Opinion on the capital markets play a crucial role in serving the national poverty reduction strategy,' clearly states that 'encourage listed companies, securities companies and other market players to establish or participate in poverty-stricken areas of industrial investment fund market-oriented operation poverty alleviation and public funds. ' Association registration in private equity funds in private equity managers to set up pro-poor equity market players, helping the private equity funds provide a 'green channel' support.

As of December 2019, in the direction of Poverty Alleviation Association filed 73 private equity products, the scale of more than 157.1 billion yuan, into a steady stream of capital flowing water for economic development in poor areas. Meanwhile, the association take the initiative in the direction of pro-poor asset securitization (ABS) product registration work to promote pro-poor financial innovation. In the filing system ABS module dedicated to embedded poverty alleviation, support for helping the ABS product quickly record, strengthen compliance oversight of helping the ABS product. As of the end of December 2019, the Association filed a total of 31 poverty alleviation ABS product, the total issue size of 16.908 billion yuan, provided strong financial support for infrastructure and livelihood projects in poor areas.

2019, China Securities Investment Fund Association on the private equity industry practice of social responsibility a questionnaire survey showed that 2018 annual private equity funds, invested a total of 105 industry bodies precision poverty relief funds 458 million yuan, 50 million investment in poverty alleviation and more than a total of 32 institutions, accounting for 30.48 percent, of which, 29 agencies precise annual investment in poverty alleviation over 100 million. In the private equity investment funds, 212 private equity managers has invested 355 million yuan poverty relief funds precise, accurate poverty of 50 million yuan investment managers accounted for 9.43%, of which, 19 managers accurate annual investment in poverty alleviation over one million yuan, six managers accurate annual investment in poverty alleviation over 10 million yuan.

Figure 1: private equity fund precise funding for poverty situation

Figure 2: private equity investment fund precise funding for poverty situation

Take Measures to implement a comprehensive poverty reduction strategy

According to the Association 'private equity practice social responsibility report 2019', in 2018 a total of 259 private equity fund managers (accounting for 12.45% of the total number of the respondents) and 329 private securities investment fund managers (the total number of respondents agencies 11.16%) carried out in all kinds of areas of poverty alleviation precise, involving industrial poverty, poor education, health, poverty alleviation, infrastructure, poverty alleviation, ecological protection poverty, consumption poverty alleviation, tourism, poverty alleviation, poverty reduction and other electricity providers poverty.

In the private equity fund management people, accurate poverty alleviation projects carried out in three areas of highest concentration are poor industry (accounting for 44.02%), education and poverty alleviation (accounting for 32.43%), health, poverty alleviation (accounting for 22.39%). In the private securities investment fund management people, accurate poverty alleviation projects carried out in three areas of highest concentration of poverty are education (accounting for 47.72%), health, poverty alleviation (accounting for 28.27%), consumer Poverty Alleviation (accounting for 27.36%). Industry bodies to carry out a wide range of precise areas of poverty alleviation, rich in content, showing the diversity of poverty means and methods.

Figure 3: Private equity investment fund poverty alleviation projects precise type

Figure 4: private equity investment fund poverty alleviation projects precise type

At the same time, the private equity industry associations to actively promote ESG investment philosophy, rich culture industries. 'Compliance, integrity, professionalism and sound' is the Essence of a new era of fund industry culture, ESG investment philosophy is an important part of professional investment culture. Association released in November 2018, 'Chinese Listed Companies ESG evaluation studies system' and 'green investor guidelines (Trial)', continued to advocate the concept of ESG investment in the industry, to encourage fund managers when choosing investment targets, not only to focus on its financial performance, while concerned about the social responsibility to fulfill, comprehensive consideration of its performance in the environmental, social, corporate governance, the practice of long-term investment, responsible investing, green investing investment philosophy, promoting unity of economic, social and environmental benefits. With ESG investment philosophy has been widely recognized and executed private equity industry, private equity fund managers to be more proactive sustainable development considerations into poverty reduction strategy and product direction, helping to attract more investment in poverty-stricken areas, help to achieve sustainable development in poor areas ,ECO development.

Play feature private equity industry

Private equity investment fund industry adopt more pro-poor manner, reflecting the industry bodies play a function of equity capital services industry in poor areas, poor industry innovation mode. Industry bodies by setting up in poor areas poor industry fund to invest in poor areas project enterprises and promote the development of related industries in poor areas, to assist enterprises to introduce the project, management, human capital, expand market channels, promote local income, employment and government revenue growth, while attract and gather industry chain upstream and downstream enterprises landing in poor areas, providing impetus for endogenous development in poor areas, to achieve 'blood' poverty alleviation.

According to the Association 'private equity practice social responsibility report 2019', surveyed private equity fund management institutions have been established or managed funds related to 'precise pro-poor' investment theme of the 42 agencies. In the agencies precise pro-poor investment projects in the year 2018, the agency conducted an accurate accounting of the largest investment projects in poverty, 64.29%; followed by two agencies to carry out precise pro-poor investment projects, accounting for 20.00%; 11.43% of the institution carried out three to five precise pro-poor investment projects, as well as 4.28% of institutions in more than five precision pro-poor investment projects.

Figure 5: Private Equity precise number of poverty alleviation projects

Precision poverty alleviation has become an important investment direction of private equity funds, the survey results show that in the year 2018 the respondents have been carried out in precise poverty alleviation work, 26.25 percent of the total investment in pro-poor institutional accurate more than 30% of the investment scale.

Figure 6: private equity fund pro-poor investment in precise proportion of distribution

Thinking remodeling with private funds 'blood' function, help fenxi poverty

2016, on behalf of the fund industry association helping poor counties designated Fenxi County, Shanxi Province. Fenxi County, formerly county resources, abundant coal and bauxite resources. With the national industrial policy adjustment of mineral resources, Fenxi county industrial layout is too simple, difficult transition in its own right, as a national poverty-stricken counties. The county's total population of 14.56 million, of which agricultural population of 12.6 million people. The county legislature filing card poverty 14158, 40982 people.

An important tool for private equity and venture capital funds and direct financing capital formation as China's capital market, for the creation of investment and enterprise development, the skill of a long process, given not only financial support, more resources docking, the professional proposal, accompanied on time. For Fenxi poor population, high incidence of poverty, weak industrial base of reality, in-depth research and analysis on county situation, the situation on the basis of poverty, together with the fund industry association, at the height of the economic structure to promote the supply side reform Fenxi County fully draw on private equity and venture capital funds practice, study and formulate the 'Hong-Chang farming industry demonstration projects, poverty alleviation fund industry to lead the development, poverty alleviation photovoltaic farm underpinning' of the poverty reduction program, private organizations, including the implementation of the agency's power industry a series of professional help, accurate supporting measures, played from the county, township and village levels set three poor industry, financial poverty, consumption poverty, poor education, poor public service portfolio, achieved a 'transfusion' and 'blood' combined with the strong support of the cause of Fenxi tackling poverty.

Funds power play, cultivating the county pillar industries.

Broiler industry is the focus on the development of pillar industries Fenxi County, with some industrial base. However, due to the lack of conditions for technical, financial, personnel and other small-scale industries, the industrial chain is short, weak anti-risk ability, need outside help to reinforce the industrial base, to achieve leapfrog development. Development of broiler industry chain, forming a pillar, have a demonstration and driving effect, both projects and funding needs help.

On the one hand it is the introduction of a strategic partner, building chicken deep processing projects. Relying on industry association resources, the introduction of strategic partners Fenxi local companies Hong-Chang broiler breeding company - national leading enterprises in Shandong Zhucheng Foreign Trade Company, to provide technical, personnel, and other support services for enterprises. December 2017, helping to complete the 27.5 tons of chicken products Fenxi Afghan export orders to achieve a zero export Fenxi historical breakthrough. The two sides also set up a joint venture Fenxi long Sheng Electronics Corporation, annual production capacity of 18,600 tons of cooked food production line conditioning products, higher value added products, enhance the ability to resist risks, promote local employment and cultivate sources of revenue for the Fenxi build broiler breeding, feed, slaughtering, processing as one of complete industrial chain.

On the other hand is a comprehensive professional and play to the advantages of the fund, boosting Fenxi broiler industry innovation and upgrading. Poverty alleviation fund industry is an important tool to carry out industrial poverty alleviation, but also an important carrier of the implementation of industry-led government, is conducive to the formation of long-term capital to help poor areas, strengthen economic strength. Association donated 10 million yuan in 2016 to Fenxi, support the establishment of Fenxi Fenxi Kai Fu poverty alleviation fund industry. Fund injection of long-Sheng (chicken deep processing project) 2.5 million yuan equity capital, and strengthening the company's capital strength and wealth of the shareholder structure, brings more support after investment services and fund shareholders. Venture capital funds as investors market-oriented, adhere to the concept early vote cast small, focusing on investment with growth potential and fast growing early stage companies, start-up companies to solve the problem of a shortage of funds, help enterprises to grow rapidly. Association help Nagaakira investment management company to introduce evidence of Shanxi mountain SME Venture Capital Fund, providing 20 million yuan convertible bond investment funds to solve the problem of project construction. Meanwhile, the association also integrated capital market system together, coordinating Shanxi Securities investment banking team, helping to regulate the internal corporate governance, capital market forces steadily grow.

In addition, the association also coordinates a benefit to the country to vote for the representative of the central rate of poverty alleviation funds and private equity fund industry to Adams as the representative of capital to carry out due diligence on broiler deep processing projects. SDIC record the initial formation of 10 million yuan of convertible bonds benefit fund investment intentions, Adams capital and other private equity funds will provide additional support in terms of follow-up industry consolidation mergers and acquisitions.

Currently, chicken deep processing project has been completed, is put into production will realize annual output value of 465 million yuan, profits of 43 million yuan, the direct creation of 600 jobs, 300 of which give priority to poor households filing cards established employment, radiating nearly 3,000 people to get rich fairly well-off. Rotary launched, but also to get a ride. Society will continue to play together system, the introduction of listed companies and fund investment resources for the Fenxi broiler industry, Fenxi help consolidate the results of poverty and enhance the effectiveness of poverty alleviation broiler industry.

Professional mobilize resources, strengthen rural collective economy.

Income poverty are unable to work the depth of poverty alleviation in poor households are 'the most difficult row to hoe,' township collective economy is weak also highlighted problems facing poor areas. Income security for the continued effective solution to the problem of poor households Fenxi depth, Fenxi township collective economic growth of the association called on private institutions, including the 35 member units donated 23.55 million yuan, was completed eight Fenxi County township level 300KW photovoltaic farm .

After completing the first step of capital investment, industry associations and working in the first line, designated to help choose the best photovoltaic farm town address and solve the problem of tight construction procurement of raw materials, contact the Academy of Agricultural Sciences and vendor selection of the most appropriate and most farm crops economy. Funds, professional advice, rationing of resources and concerted efforts to 'agricultural photovoltaic hybrid' design concept of the real ground photovoltaic farm, generating electricity revenue by forming a photovoltaic power plant direct subsidies for about 800 poor households are unable to work depth, providing the underpinning support, while relying on the farm planting and breeding projects and projects to achieve approximately 80 filing cards established employment income of poor households to achieve working out of poverty. Each seat photovoltaic farms with an average annual comprehensive income over 350,000 yuan, to achieve a 'blood transfusion' in combination with 'blood', and strengthening the rural collective economic strength, effective solution to the depth of poverty. By the end of 2019, eight total generating capacity of photovoltaic power plant 4462600 degrees, the cumulative generating income 3.75 million yuan. Remove the operating costs, funding has been allocated for the 1882 poor households 2.4134 million yuan, the average income of about 1280 yuan.

Conduct Consumption poverty alleviation, support rustic agriculture.

Consumption poverty using the 'purchase on behalf of the tax' way 'to buy on behalf of the gang' may be more directly help poor rural income poverty in developing industries, to further mobilize poor people rely on their own efforts to achieve poverty alleviation initiative, to achieve stable poverty. Yulu pear as a feature of high-quality agricultural products Fenxi, is Fenxi focus on the development of agricultural projects, 'wine is also afraid of deep alley,' pear sales of poverty is extremely important for the poor masses. Association for the problem of high-quality agricultural produce in remote poverty-stricken areas difficult and high-end consumer market docking, the advantage of resources and private equity fund managers, the implementation of the 'Internet +' action to help Fenxi introduced Jingdong Mall, Mall and other electronic business platform necessary to create 'Jingdong Fenxi specialty Museum 'and Fenxi Yulu pear sales outlets, to build a sustainable long-term stability Fenxi characteristics of agricultural sales channels. By the end of 2019, Yulu pear sales directly contributing to the filing cards stand 309 1,112 poor households, the average annual income of about 4,000 yuan.

Improve public sector mechanisms to guide industry efforts to strengthen pro-poor public

To co-ordinate the work of public fund industry poverty, promoting pro-poor welfare fund industry to actively fulfill social responsibility, in August 2017, the association set up a 'pro-poor public fund industry Joint Committee' in Fenxi County, Shanxi Province designated poor counties. By design this system will co-fund industry, publicize and implement the national poverty reduction policies, share experiences poverty, urban poverty action industry, the implementation of poverty alleviation projects of cooperation, made a useful exploration to lead the industry in terms of pro-poor public welfare.

Helping the poor is a traditional virtue of the Chinese nation, but also fund public cultural industry practice, reflecting effective actions to take on the responsibility. 'Chinese private equity fund industry practice of social responsibility report (2019)' shows that private equity firms surveyed in the year 2018, 147 public sector organizations in the charitable total investment amount of more than $ 70 million, the charity invested over 500 000 the agency has 25 yuan, which invested over one million yuan of institutions 22. Private equity investment institutions surveyed, the total invested 283 private securities investment fund managers in terms of public charity of more than 270 million yuan, the amount spent on public welfare charity managers in more than 50 million are 11, of which eight managers 2018 annual charitable donation invested over one million yuan.

Compliance is trustworthy private equity industry must adhere to the bottom line, insurmountable red line, is the social responsibility of the industry to establish a society of high moral line. The former must enforce compliance, which should be encouraged to practice. The private equity industry is still in the early stages of development, but many organizations have started to show consciousness of social responsibility practice, played an important role in poverty alleviation. We firmly believe that actively practice social responsibility, the responsibility to carry out the investment at the core of sustainable development is the inevitable trend of the future sustainable development of the private equity industry health, but also the proper meaning.

(Reprinted from: China's fund industry association official micro)

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