JD Capital was listed, marking a new pattern of China’s asset management market
2014-04-28
One small step for JD Capital, one giant leap for China’s asset management industry.
On April 24th, JD Capital, a well-know PE enterprise in China, was listed in the “New Third Board” and became the first investment management enterprise.
According to reply made by NEEQ Co., Ltd., JD Capital issued 5.798 million shares at the price of 610 yuan per share once listed, trading 3.537 billion yuan. After JD Capital was listed, its net assets reached 3.64 billion yuan. Truly, it can be called the First Stock in the New Third Board based on its net assets or its market value.
It is a historical landmark event. Some market participants stated that the fact that JD Capital was listed meant that China had opened a door for PE enterprises to be listed. Before then, LUCION Chuangtou, as the only one investment enterprise, was listed in the domestic capital market after its transformation.
It is undeniable that the investment management institutions still face some legal impediments if they want to be listed directly due to exiting laws, regulations and understanding. The government approved the application of JD Capital for being listed in the New Third Board, showing their confirmation on 7-year development of JD Capital and their persistence in advance with the times.
Although born from grass roots, JD Capital has overturned the “towering” image of traditional PE enterprises and created a lot of myths and miracles in the investment community with its invincible spirits. So far, JD Capital has managed more than 26.4 billion yuan and invested nearly 200 enterprises, accordingly spreading many outstanding seeds in China’s industrial economy and capital market.
Where there is fresh water from the source, there will clear water in the dyke. China’s capital market need such kind of “fresh water” to help it develop and grow, that is, listed enterprises continue to flow into and gather in the capital market. PE enterprises are one of “diggers” and builders of sources of the capital market, and their ability and quality determine the quality of enterprises to be listed to the greatest extent. In this sense, if PE enterprises can be listed, they may resolve issues about the quality of China’s listed enterprises which has been criticized. If the PE enterprise is under public supervision, they will do their best to serve the enterprises to be invested so as to increase and create new values for them.
Based on rigid restrictions in corporate management and information disclosure of public enterprises, we believe that we not only continue to build and improve our brand values but also will further refine work in the investment field, with a view to laying a solid foundation for being listed in the future.
China has been the second largest economy in the world. China-rooted asset management enterprises have a huge gap in asset scale and management capability with those in mature economies such as US and Europe, and can’t match China’s global economic status.
In developed economies, asset management enterprises usually manage hundreds of millions dollars, and some even more than trillions dollars, while China-based market-oriented enterprises usually manage billions yuan or tens of billions yuan.
From a view of the global capital market, many well-know investment institutions and funds have been listed. KKR fund was the first fund listed in Amsterdam Stock Exchange, Netherlands, in 2006, raising 5 billion dollars and opening a door for PE funds to be listed. After then, KKR Group was listed in New York Stock Exchange (NYSE), in July 2010.
Blackstone Group was listed on the NYSE in June 2007, Apollo Global Management, LLC on the Nasdaq in March 2011, and Carlyle Group also on the Nasdaq in May 2012.
Undoubtedly, it is a weakness of China’s capital market. If China asset management institutions want to build their global competitiveness, they need more help to grow bigger and stronger as quickly as they can by using capital market.
Currently, China’s economy is on the way to the second season which will be more wonderful. The macro-control policy framework, with the principles of “Stabilizing Increase, Adjusting Structure, Promoting Transformation, Benefiting People”. Undoubtedly, industrial M&A will be the most important element to realize transformation and upgrade of China’s economy.
China is entering a brand-new M&A age. Only M&A can optimize quality of listed enterprises, and only M & A can realize the industrial upgrade and transformation. Obviously, this has created an important strategic opportunity and a historic stage for JD Capital and other investment institutions.
Can JD Capital and its people realize their dream? Will JD Capital be China’s Blackstone, Carlyle or KKR? Let’s wait and see what will happen. However, JD Capital has been listed and therefore its each and every move is deemed to be in the spotlight. It is not only about honor, and about responsibility.