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CoStone Qomolangma Fund, a Complete Victory in 19 Projects across 3 Fields with 1.4bn Investment

2016.08.05 Chen Yanli Views:


CoStone Qomolangma Fund, an excellent PE investment fund since August 2011, has gained a complete victory in 19 projects across 3 fields with 1.4bn investment. Over 50% of its projects will go public, earning CoStone 5 times more than 75% of its original capital of investment.

 CoStone Qomolangma Fund, an excellent PE investment fund since August 2011, has gained a complete victory in 19 projects across 3 fields with 1.4bn investment. Over 50% of its projects will go public, earning CoStone 5 times more than 75% of its original capital of investment.

 According to Chen Yanli, the CoStone partner, “in China’s PE investment market, short-term arbitrage will not pay off, only investment to industries can. CoStone values quality over scale and speed. 

 There are three determinates in Qomolangma Fund’s success: first, no loss; second, high-growth companies for profits-making; third, higher evaluation by integrating exits into the capital market”. 

First, no loss

 Target industries should be in line with China’s economic growth and industrial development. Investment strategies should be promptly adjusted to the market demand and trend. Risks should be controlled by a stable and sound internal management framework supported by sensible decisions, fining industrial decisions, and professional investment capacity.

Second, high-growth companies for profits-making

 Portfolio companies should be able to grow in the long run and bring profits to investors. Besides, they should be in newly emerged and attractive industries. We never invest in over-valued industries or companies. It is the superb R&D, marketing strategies, and core technologies of Asymchem Laboratories that attracts CoStone Qomolangma. It is the balanced business structure, support from a first-tier TV station, cinemas, and excellent management team that attracts CoStone Qomolangma.


Third, higher evaluation by integrating exits into the capital market

 Potential portfolio companies should be of scale. Small companies with a low industrial rank can hardly make it to IPO, be it on the Mainboard, the GEM, or the NEEQ. PE investment aims to bring portfolio companies to IPO, the safest way of exit.


The above is an excerpt of PE Daily’s interview with Chen Yanli.

Rewritten by Chen Cong, Edited by Li Yunzhen, Du Zhixin

The year 2019 marks the fortieth anniversary of China’s Reform &Opening-Up, once again, we meet at the turning point of history. What’s the next step for the game, is there any clear guidance? The answer is affirmative.

Our country is enjoying a good momentum of development, which does not come from the Washington Consensus nor the Beijing Consensus. China’s experience has proved that both the visible hand and the invisible hand are crucial: the visible hand, stands for the government-led reform, and would yield benefits for reform and opening up; the invisible hand, stands for the Marginal Power represented by the private sector, and would improve economic efficiency and tax collection, create jobs and employment opportunities.

Provided that we want to protect and expand the benefits form reform, three simple but mandatory agreements are to be made and followed: No.1 Private ownership must be recognized, protected and treated equally with public ownership constitutionally, both ownerships are scared and inviolable;No.2 Make further clarification of the principal position of market economy, “deepen economic system reform by centering on the decisive role of the market in allocating resources”, as President Xi addressed in the third Plenary Session of the 18th CPC Central Committee;No.3 Implement the guiding principles of “comprehensively promoting law-based governance” of the fourth plenum. The rule of law is essential for economic growth, irreplaceable to protect private ownership, and necessary to encourage innovation and entrepreneurship.

Above are three rules for us to avoid falling into the Middle-income Trap. Assuming that we are breaking systematic barriers to private enterprises’ participation in market economy, and boosting innovation and entrepreneurship of our society, then we are heading towards a promoting direction. We are marching in the path of light, regardless of the ups and downs of Sino-US relationship, the drop in GDP growth rate, or the monetary policy.

These principals also apply on knowing how better to run a business: don’t be hedged by rules and regulations at the beginning, pay more attention to your survival, and you’ll learn more when you start your second business.

For many years, Huawei has been the only Chinese company on the list of the Top 50 R&D Spenders. Regardless of the economy and its income, what Huawei has been doing is investing in its future, dedicated to R&D, continuously and resolutely. This provisional work underscores Huawei’s accomplishments, making Huawei anindustry leader.

So, there are standard answers on how to run a company,which could be summarized as concentration and professional dedication, continuous investment on innovation and trying harder in R&D. Entrepreneurship is also important, every single company needs entrepreneurs to push aside all obstacles and difficulties, to implement strategies and ideas. We, as investors, are destined to look for such outstanding entrepreneurs and their companies, invest in them and partner with them.

At this key point of history, a country, a company, or asingle individual, will all need to find the right path. Four decades after the Reform and Opening-up, it’s time to learn from our experience and stop “wadding across


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