China Everbright Limited AI New Economy Fund: Riding wave of Smart Economy with industry investments

China Everbright Limited (CEL), together with its core strategic technology platform Terminus Group, recently announced the joint launch of 'CEL AI New Economy Fund', aiming to raise RMB 10 billion and operate in both RMB and USD. As of now, RMB 7 billion has been collected.

Victor Ai, the head of China Everbright New Economy Fund, the Founder and the CEO of Terminus Group, believes that the industry opportunities are currently shifting from traditional economies to what we know as 'smart economies'. The key to making good investments in new smart economies lies in identifying the opportunities that new economies bring and being able to visualize the future advantages of the innovative solutions. This indeed requires the investors to step back and look at the emerging industries from a broader perspective, with a whole picture in mind. The aforementioned kind of approach is crucial to understand the secondary industries and their related sectors, and as a result – accurately estimate the valuation to the potential investment targets.

Riding the wave of smart economy investments

What is the reason behind starting the CEL AI New Economy Fund at this point in time? Victor believes that the rise of the smart economy will bring investment opportunities as good as those brought to us by the new technological revolution, if not better. The new technology giants and industry leaders are bound to emerge. It is a sea of the new investment possibilities that motivates the team to get involved with no hesitation.

"The smart economy is another technological revolution, and it is just around the corner." Victor emphasized. "The last technological revolution was dominated by the Internet, giving rise to Internet giants such as Baidu, Alibaba and Tencent. We have reasons to believe that the rise of smart economies will reshape the entire business environments and industrial landscape the way previous Internet revolution did."

Victor further pointed out that with AlphaGo's victory over Lee Sedol, 2016 was regarded as the first year of artificial intelligence. He believes that in five years, about 30% of the top 20 technology companies in China by market value will emerge from the new smart economy sector.

"These companies are different from the previous generation of Internet companies that mainly benefited from China's huge market and demographics. The new generation of tech companies will reach their full economic potential by going global." Victor commented.

It was a huge leap forward and another iteration of the China Everbright New Economy Fund originally established in 2016, and could be described as its 2.0 version. Victor disclosed that the original China Everbright New Economy Fund had invested about 30 billion RMB in more than 70 startups in the new economy sector up to date, many of which have been either listed or have received a new round of financing. The portfolio companies include a number of familiar names such as SenseTime, 4Paradigm, iQIYI, NetEase Cloud Music, Meituan Dianping, Miss Fresh, NIO, XPENG Motors, JD Logistics, Fourth Paradigm, iQiyi, NetEase Cloud Music, China UnionPay Merchant Services, and so forth.

As investment dividends migrate from the Internet and mobile Internet sectors to the new smart economy, the fund will also shift its focus to the implementation and commercial application of technologies, and pay more attention to investing in crucial technologies remaining the core foundation of the concept of AI CITY.

According to Victor, as early as the beginning stage of the smart economy, his team already got involved in a number of related tech projects such as those of SenseTime and QIANXIN, and secured its intellectual property against future competition. As the technology matures, the new smart economy will see a surge in the number of developed tech applications and solutions. In this next phase of the enormous growth of the entirely new industry, 'CEL AI New Economy Fund' is destined to play a significant role.

It is worth mentioning that 'CEL AI New Economy Fund' purposely chooses to operate in both RMB and USD. Victor explained: 'That solution makes the fund more flexible. We plan to set the RMB to USD ratio to 1:1. The part of the funds kept in USD will prove useful for overseas mergers and acquisitions, and for the US-listed companies that decide to have secondary listings in HKSE or the Chinese mainland. At present, in order to further expand their business, some overseas companies that have already earned a good reputation and have established their positions at the Chinese markets, are trying to seek cooperation with the lead domestic companies in their respective sectors, either by mergers, acquisitions, or joint ventures.'