STATE CASH is burning a hole in the pocket of Shenzhen’s Communist Party secretary. Wang Weizhong told angel investors late last year that if they set up a fund in the south China tech hub, the government would bear 40% of their losses. For the monstrous 400 bn-yuan ($62 bn) state fund backing such activity, an investment of 3 m yuan—the size of a typical angel investment—is a rounding error. For private investors the invitation sounds too good to be true. It might be.
深圳市委书记王伟中急于把口袋里的国家经费花出去。去年底他告诉天使投资人，如果他们在中国南方的这个技术中心设立一个基金，政府会承担他们 40% 的损失。支持这类投资活动的政府基金的规模已达到 4000 亿元人民币之巨，相比之下一笔典型的天使投资——300 万元人民币——连个零头都算不上。在私人投资者听来，这个邀请好得叫人难以置信。他们的怀疑可能有其道理。
After several years of loose monetary conditions and bumper dealmaking, liquidity in private equity (PE) in China began to dry up in 2018. New regulations made it harder for banks and insurers to invest. So-called“government-guided”funds set up by local governments or national ministries, by contrast, thrived. Local authorities were encouraged to launch such investment vehicles to lure startups to their cities, along with talent, technology and, eventually, tax revenues. Owing to a lack of in-house investment talent, most of them have acted as limited partners (LPs) in private-sector funds.
在经过几年宽松的货币环境和繁多的交易之后，中国的私募股权 (PE) 的流动性从 2018 年开始枯竭。新的监管规定使银行和保险公司更难进行投资。与之形成反差的是，由地方政府或国家部委设立的所谓「政府引导」基金却推进得如火如荼。地方政府被鼓励推出这类投资工具来吸引创业公司搬到它们的城市，一并带来人才、技术，以及最终是——税收。由于缺乏自己内部的投资人才，这些基金多数在私营部门基金中充当有限合伙人（LP）。
More than 1,000 government-guided funds have cropped up across China since 2015. By late 2020 they managed some 9.4 trn yuan, according to China Venture, a research firm. A national fund focused on upgrading manufacturing technology held 147 bn yuan at the last count. One specialising in microchips exceeded 200 bn yuan in 2019. Almost every city of note across China operates its own fund. A municipal fund in Shenzhen says it has more than 400 bn yuan in assets under management, making it the largest city-level manager of its kind. In the northern city of Tianjin, the Haihe River Industry Fund is putting to work 100 bn yuan along with another 400 bn yuan from other investors.
自 2015 年以来，中国各地已涌现了一千多只政府引导基金。据研究公司中国风险投资研究院称，到 2020 年底，它们管理着约 9.4 万亿元人民币。一只专注于提升制造技术的国家基金在最近一次统计时持有 1470 亿元。另一只专注微芯片的基金在 2019 年持有的资金超过 2000 亿元。中国几乎每个有名的城市都运作着自己的基金。深圳一只市政基金称其管理的资产超过 4000 亿元，使其成为同类市级投资管理者中规模最大的一支。在北方城市天津，海河产业基金正投入 1000 亿元，连同来自其他投资者的 4000 亿元一起运转起来。
As a result, PE in China is now flush with state financing. In 2015 private-sector money made up at least 70% of limited-partner funds pouring into the industry. By the end of 2019, state-backed funds accounted for at least that much. Their dominance has only increased since then; by some counts they hold more than 90% of the money in Chinese funds of funds (IE, those that invest in other funds). According to Chinese media, learning to deal with government funds is now a“required course”for PE managers.
其结果是，中国的私募股权投资如今充斥着国家融资。2015 年，私营部门资金至少占到注入该行业的有限合伙人基金的 70%。到 2019 年底，国家支持的基金已经至少占到了这个比例。而此后这种主导地位更是有增无减。根据某些统计，它们持有中国的基金中基金（即投资于其他基金的基金）资金的 90% 以上。中国媒体称，学习如何处理政府基金现在已是私募股权经理的「必修课」。
A degree of state influence is now unavoidable. But whether that is beneficial or not is hotly contested. Some investors and advisers say taking government cash can help align private and public interests.“Government LPs can open doors for you,”says Kiki Yang of Bain, a consulting firm. State fund managers often understand local policy objectives and can steer investors in the right direction, says a venture-capital investor. The influence can go too far, however: Shenzhen Capital, a huge state fund, posted pictures on its website of a meeting it held in December where it helped each of the 42 companies it had invested in to launch a Communist Party committee. These are seen as a way to imbue private companies with party ideology.
某种程度的国家影响已无可避免。但这是否有益，争论很激烈。一些投资者和顾问说接受政府现金有助于协调私人和公共利益。「政府有限合伙人可以作为敲门砖。」咨询公司贝恩的杨琪琪说。一位风险资本投资者表示，政府基金经理通常了解地方政策目标，可以引导投资者朝正确的方向走。然而这种影响有可能走过头：庞大的政府基金深创投在其网站上发布了它在去年 12 月召开的一次会议的照片，在那次会上它帮助自己投资的全部 42 家公司分别设立了党支部。这被视为向私营企业灌输党的意识形态的一种方式。
There are other drawbacks, too. Government funds are“squeezing out other LPs”，says one of China’s top venture-capital investors. Clear mismatches in interests have also surfaced. Members of China’s PE elite cut their teeth at global investment groups such as KKR and TPG, two American firms. Their main aim is to produce hefty returns for LPs. Not so for government-guided funds.“Rarely do you have a guided fund that is chasing returns,”says an adviser to several of them. Instead, state investors are mainly trying to engineer a windfall in local tax revenues by attracting new companies, especially tech groups. Balancing these interests can lead to tensions, says one China-based investor, and often results in investments that hinge on whether or not a company is willing to move to a specific city. Some even fear such problems could gradually lower overall returns for private-sector investors.
还有其他弊端。中国一位顶尖的风险投资者说，政府基金正在「排挤其他有限合伙人」。利益上的明显不一致也开始浮出水面。中国私募股权投资精英圈的成员在美国公司 KKR 和 TPG 等全球投资集团中得到初步历练，他们的主要目标是为有限合伙人带来丰厚回报。但政府引导基金不是这样。「你很少看到有哪家引导基金在追求投资回报的。」为几只政府引导基金提供咨询的一名顾问说。相反，政府投资方主要试图通过吸引来新企业——尤其是科技集团——来为地方税收创造意外收获。一位身在中国的投资者表示，尝试平衡这些利益可能会导致紧张拉锯，并且往往导致投资决定取决于一家公司是否愿意搬到特定城市。一些人甚至担心这类问题会逐渐降低私营部门投资者的总体回报。
So far, though, the arrangement has worked well for many private funds. With smaller funds dying off over the past few years—either owing to lack of capital or huge losses—competition for target assets has eased a little. The market is healthier, investors say, as private and state capital is channelled to better fund managers.
But will it last? One lingering concern for some PE investors is that government funds might dispense with the middlemen, and do more of their own direct investing. Several large government funds have been recruiting from private-sector banks and law firms, bolstering their ability to cut deals, notes a lawyer who works with them.“They are starting to compete with us directly,”says the venture-capital investor. Private investors will appreciate state cash much Less when they are vying to outbid it.