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00:00We know that you're working on a report and some sort of details on exactly how you're performing at the end of last year,
00:06but what can you share from us, maybe some of the highlights that might be in those figures?
00:10Well, first of all, good morning, and thank you so much for having me today.
00:13As Annabelle mentioned, we are working on a number of deliverables and also the sharing and disclosure of those to the public.
00:20To take a bit of snapshot, I think to put into context, we have a due mandate.
00:25So first is to deliver financial return, as you said, because we are a long-term professional institutional investor.
00:32At the same time, we, as part of the Hong Kong team, we want to reimagine the power of public capital and also bring benefit to the economic growth of Hong Kong.
00:42So in that context, to share a bit of the data points, first of all, in terms of the capital deployment and also the investment income,
00:50as of end of last year, we have deployed in underlying projects less than 20% of our initial size of capital.
00:57And at the same time, we have recorded more than $2 billion Hong Kong in terms of investment return.
01:05And this is actually in perfect alignment with what we have settled for, because we want to move ahead very quickly,
01:11cast the net as wide as possible to capture good companies' potential growth of Hong Kong,
01:17while at the same time, we need to balance investment risk.
01:19So we usually, we move quickly, but then we start small in each and every deal.
01:24But when they grow, and also ahead of or meeting our standard, we put in additional capital.
01:30So I could also give you one example, because there are deals that we have been investing in them in a repeated mode,
01:37just like what I've mentioned.
01:39A few days ago, like on Monday, we announced our leading this round of financing in a company called Cornerstone Robotics,
01:47basically a surgical robotic company.
01:49And in this current round, we have also brought in other silver and gold funds and also leading industrial leader to the company.
01:57You mentioned you deployed less than 20% of your initial size of the capital here right now.
02:02What do you make of the pacing of that?
02:05Do you think that, you said things are going quickly, so you're comfortable with the pace so far?
02:10Well, we have different stages of our plan in terms of deployment.
02:14The first stage, I would say from start to around middle of 2024, we try to cast the net wide enough to move very quickly,
02:21because that's the only way we could capture and have a stake in good companies and translate that into growth impetus for Hong Kong.
02:28So we invest in more than, currently, more than 150 companies.
02:32But as you said, as of last year, we deployed only less than 20% of the capital.
02:37But this is for a reason, because we need to balance the speed with also the investment risk.
02:42But at the same time, I could also share other dimensions of how we leverage the capital of others in terms of making investment.
02:50We always quoted a capital multiplier ratio of 1 to 6, meaning that every dollar we put into work in the underlying project,
03:00we were able to attract other market long-term capital of more than $6.
03:04So you could imagine that with our less than 20% of capital deployed in underlying projects,
03:11we actually bring in much more from the outside world.
03:14The other example is also that apart from our own core of capital, core pocket, thanks to the government's support,
03:21basically, we have other capitals where we could also manage or oversee the management,
03:27such as what we call the CIESIP, the Capital Investment Entrance Scheme Investment Portfolio,
03:34where for this round, for the 2025 capital badge, we just issued the investment or invitation for investment proposal two weeks ago.
03:43So basically, that's bringing us an additional, I think, of at least $2.8 billion for deployment with different managers.
03:52So less than 20% of the initial capital deployed across around or more than 150 projects.
03:58So it sort of tells me the amount of money that you're investing or HKIC investing is relatively small for each of these companies.
04:06Maybe they're more early stage, so it's an appropriate level of investment.
04:10But would you be looking at taking a bigger bet, for instance, and putting a lot more of your capital to work in one or two particular businesses?
04:18Yeah, that's a great question.
04:20And that's also the second phase of our plan.
04:22Because, as I said, from the very beginning, we need to be very cautious because it's public money.
04:27We want to place the bet in the right company.
04:29So usually what we do, we place it in a small way, and we set milestone.
04:34Once these companies or partners, they hit the milestone, and by the way, I think it's music to our ears.
04:40A lot of them have been growing much quicker than expected.
04:43So once they have that, we have the right to invest more.
04:47So that's the example of Cornerstone.
04:49And talking about the fact that this is now an outer phase of the development, I am actually seeing the great trend of starting the second half of 2025, which would also go into 2026.
05:03As Annabelle mentioned, we will be doing a lot more partnership with regional and international partners, and we will be investing with a larger scale and also in a more systematic manner in different themes.
05:15Can you tell us more about who these partnerships are?
05:17Can you give us any more?
05:18Well, we actually have a circle of friends around the world, so those could be super wealth funds and long-term partners or long-term capitals like pension plans from around the world.
05:31And we also see a lot of inward inquiries from the big corporates in different parts of the world, for example, in Southeast Asia and also Middle East.
05:40A lot of them, I think they are seeing great potential and investment opportunities in Hong Kong or through Hong Kong into Chinese mainland.
05:48Looking that we are a natural beneficiary as part of China to benefit from the growth impetus and also equally importantly, on innovation and technology, I think a very good story is R&D in Hong Kong.
06:00But at the same time, we also take good advantage in terms of the manufacturing chain and the value chain with other sibling cities in the Greater Bay Area.
06:11You mentioned the Middle East, and I think that we've seen that huge trend.
06:15It's very clear now. Investments in China, Hong Kong being the conduit, Middle East is sort of a big investor and the sovereign wealth funds are very powerful in the Middle East.
06:26Big investors in tech in particular. Which ones would you want to work with the most or which ones are you looking to work with?
06:30Well, we are very open minded. I think our our worry today is we don't do we don't move ahead quick enough to find the best partner for specific themes.
06:41And as we earlier mentioned, there are different themes that we look at hard and core technology, biotech and also green energy or new energy technology.
06:49So who are the best partners, I would say, really depends on the sector and what the wisdom and the resources and the perspective that they could bring to the table.
06:59And I think it's not only like channeling the capital from them. We need to think about the recipient companies. So what do they need?
07:06So I think for us, we are very cognizant that we need to be like a middle person, super connector, super value adder, but with the full understanding of what both sides need.
07:18You have four different sort of portfolios, right? The Hong Kong growth, Greater Bay, the strategic tech fund, the co-investment fund. Can you tell us how each of those are performing?
07:28Well, I think those are performing well, particularly the strategic tech fund, because as you could imagine, it is very, very focused on innovation and technology.
07:37And we are doing great on that front. And I would say that we talked about the investment income earlier, more than two billion Hong Kong dollar with less than 20 percent of our capital.
07:47So a lot of the growth drivers, I think, have been from the biotech companies because they have been growing really good in terms of the growth trajectory.
07:57And a few examples in terms of the growth, which are validated by objective facts and also other investors.
08:04Number one, we talk about the listed companies, two of our portfolio company already listed in Hong Kong, generating double or triple digit of IRR respectively.
08:14And more than 10 companies already filed for IPO in Hong Kong this year.
08:19Apart from that, it's not only about IPO, but possible talks on M&A and a lot of up rounds in terms of the company's growth after we invested.
08:29And so, as I earlier mentioned, we always want to extend and expand our regional partnership to have even more systematic, larger scale partnership with regional and international investors, because the potential is really great.
08:44This less than 20 percent of capital that's been deployed, that's the end 2024 figure.
08:48Correct.
08:49Yeah. Can you give us an update then for 2025?
08:51What's it going to look like and what does it look like into next year as well?
08:54How much are you going to have deployed?
08:55Well, definitely it's growing because, as I said, as we move from the first stage of starting small, this is the stage where we're scaling up, both in terms of getting to know the company.
09:05And for those who have done well, we double up and then we lead the additional rounds.
09:11So this number is going to grow.
09:13And the other dimension, as I also just shared, we're going to form partnership with other investors in this region and also internationally.
09:22So those definitely also look to deploy capital in a scalable manner.
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