In the Chinese venture capital circle, Yan Yan is undoubtedly a godfather-like figure. Not only because he started his career in VC and PE early - as early as 1994, Yan became the managing director of AIG's AIF fund (Asia Infrastructure Fund); but also because of his outstanding investment performance - in 2003, Yan invested $40 million in Shanda Group and exited with $560 million in 2005. This was not even his most successful case; in the Perfect World investment case, when the market value of Perfect World was at its highest, Yan's fund could make more than 80 times profit in a year! Whether it was in Softbank Asia or after leaving Softbank to establish SAIF Partners, the annual return rate of the VC funds managed by Yan was close to 100%, making it one of the most profitable VC funds in Asia. If we expand the comparison range to the whole world, the return rate of the VC funds managed by Yan still ranks among the top.
Yan is extremely confident about his investment vision. He never denied that the investment performance of SAIF Partners was largely due to their investment level. But Yan emphasized at the same time that besides vision, timing is also very important. The timing Yan referred to mainly refers to the overall economic environment of China since 2001 - In the past ten years, China's economy has developed rapidly, and a large number of excellent private enterprises have emerged, providing many good project sources for venture capital; international capital markets have increasingly recognized the "China concept", and Chinese assets have gone through a process from discount to premium; good investment projects continue to emerge, but the efficiency of China's financial market is low, making it difficult for start-up enterprises to obtain financing, which gives venture capitalists strong pricing power.
Since the second half of this year, the US subprime crisis has gradually evolved into a global financial crisis, and China's economy has also been greatly impacted. The heat of VC and PE since 2007 has obviously cooled down, and some smaller domestic venture capital institutions have even withdrawn from the market. Some well-known venture capitalists have also called for caution, claiming that there is a bubble in China's PE and VC sectors, and venture capital institutions should be cautious in such an economic situation.
But Yan does not agree with this view. In an exclusive interview with the Shanghai Securities News, Yan said that there is no bubble in China's venture capital industry. On the contrary, from the perspective of the supply and demand relationship of funds, the demand for funds in China far exceeds the supply, and there are still a large number of good projects in China that cannot get financing. The current financial crisis has indeed had a great impact on the real economy, but the current asset prices have tended to be reasonable. Now is the busiest time for venture capitalists.
"There is no better career than venture capital."