Kangqiao Capital hat die erste Schließung eines M&A-Fonds im Wert von über 7 Milliarden Yuan abgeschlossen. Der Weg von Fu Wei als "Minderheitler"

Text by | Ren Qian

It has been learned from "Dark Waves" that C-Bridge Capital has officially completed the first close of its first RMB healthcare M&A fund, with a scale exceeding 7 billion yuan. The target size of the fund is 10 billion yuan.

This is currently the largest domestic M&A fund focusing on the healthcare sector. Managed by C-Bridge Capital, C-Bridge Capital and Beijing Shunxi Fund jointly serve as general partners. The latter is a market-oriented fund investment platform under Beijing State-owned Assets Management Co., Ltd.

We've learned that the initial major investors in this fund are state-owned platforms such as Beijing State-owned Assets Management Co., Ltd. (3.467 billion yuan) and Beijing Yizhuang International Biomedical Investment Management Co., Ltd. (3 billion yuan). In the future, it's not ruled out that market-oriented funds such as insurance funds will be attracted.

The focus remains on the healthcare industry where C-Bridge Capital excels, including M&A and integration in sub - sectors such as biomedicine, medical devices, consumer healthcare, and healthcare industry services.

This M&A fund represents C-Bridge Capital's second collaboration with Beijing State-owned Assets Management Co., Ltd. and Shunxi Fund. The biotechnology and large health industries are also one of the four leading industries in Beijing Economic - Technological Development Area. The new fund combines C-Bridge Capital's global perspective and "investor - operator" model in the healthcare M&A field with the advantages of Beijing's municipal and district - level state - owned assets in resource integration and policy support.

Over the past decade, the emerging C-Bridge Capital has grown into one of the most unexpected funds in the healthcare investment industry. Not only has it raised a capital pool of over $9 billion in the less - glamorous healthcare industry (both in US dollars and RMB), but more crucially, in an era when the primary market was frantically hunting for big deals, C-Bridge Capital rarely chose another path of "achieving miracles through great efforts" and proved its success.

In recent years, people have started to study C-Bridge Capital's strategies and have become curious about Fu Wei, the post - 80s CEO: How can an investor without a medical background, when deciding to shift to M&A, leverage huge amounts of funds, attract global talents, and reshape the ecosystem with partners? Why do large state - owned enterprises invest twice? And how can they find the right time to exit when the invested company's business reaches its peak?

However, it will be found that most of the theories put forward by Fu Wei - for example, comparing M&A investors to "blue - collar workers" in the investment industry and likening the repeatable value creation, experience, and ability accumulation in the M&A investment process to an "engineered" "assembly line"; "always doing difficult but right things and making decisions with long - term value for the company" - are the most common principles in the overseas M&A industry.

The real threshold lies in the ability to organize large - scale funds and conduct transactions, as well as the strength to operate an enterprise - these inseparable elements determine the final outcome.

Part 01

The Winning Method of the Minority

The most extreme representative case of C-Bridge Capital's healthcare M&A is Everest Medicines.

Everest Medicines was the first company founded by C-Bridge Capital in 2017 after its transformation into an incubator in the role of a "co - entrepreneur". It led the Series A financing of $50 million and Series B financing of $60 million. Its business model is the commonly used License - in model, which quickly deployed in areas such as oncology and autoimmunity while building an in - house R & D platform.

In 2019, a milestone event occurred. Everest Medicines spent a year overcoming all difficulties and acquired the exclusive Asian rights to Trodelvy from Immunomedics, a subsidiary of Gilead, for a total price of $835 million. This was the largest License - in deal in Asia at that time, directly propelling Everest Medicines' market value to exceed HK$20 billion on the day of its IPO on the Hong Kong Stock Exchange in 2020.

This IPO had already allowed C-Bridge Capital, the major shareholder with over 60% stake, to reap huge profits. According to the usual logic, waiting for a certain opportunity to exit would have ended the story.

However, C-Bridge Capital did not exit. Subsequently, the company experienced a "roller - coaster" - like fluctuation: In 2022, after Everest Medicines returned the rights to Trodelvy to Gilead, its stock price plummeted to a minimum of HK$6 per share (the issue price was HK$55, and the peak was HK$104).

This huge gap was foreseen by C-Bridge Capital because the decision was made by Fu Wei. In the industry's downturn, stripping the unprofitable oncology team and recouping funds to focus on the commercialization of nephrology and antibiotics was the method he found for the enterprise to survive - protecting the basic market and attacking the growth market. C-Bridge Capital also used its global resources to re - configure the team for Everest Medicines and helped it sell drugs to markets in South Korea, Southeast Asia, and even the United States.

Surprisingly, on March 7th this year, Everest Medicines' stock price reached a three - year high, rising above HK$60 and exceeding the IPO issue price in 2020. The cumulative increase from the low point has exceeded 880%, and the current market value has returned to HK$20 billion. Now, Luo Yongqing, the new CEO of Everest Medicines, has even set a goal of "selling drugs worth 10 billion yuan in 2030".

I - Mab also went through a process of survival by cutting off the "arm": Since participating in the establishment of I - Mab in 2016, C-Bridge Capital promoted the pipeline construction and team building and finally completed its IPO. In 2023, the most prominent core product of I - Mab, CD47 lenzilumab, encountered setbacks, and its market value shrank significantly from the peak of $7 billion.

C-Bridge Capital decided to spin off for self - rescue: stripping the assets in China, retaining the pipeline with core international value, and reorganizing the management. Fu Wei stepped in to become the new chairman of the board of I - Mab.

The histories of Everest Medicines and I - Mab have been mentioned in many articles, but the ability to transform a company on the verge of collapse is the most important part of the narrative: All along, C-Bridge Capital has adopted a high - dimensional approach, a game of maximizing the "cake" - money, ideas, and actions must create infinite value and then be consistently implemented.

For M&A funds, choosing the right time to exit has never been an option.

Part 02

Courage is the Switch of Thinking

Reviewing C-Bridge Capital's fundraising process, it can be found that its management scale made a significant leap starting from the fifth - generation US dollar fund (over $1.6 billion), plus this 10 - billion - yuan RMB fund.

The purpose of expanding the scale is to target larger deals. For example, in recent years, it has started to attempt overseas incubation and M&A and for the first time tried cross - border pharmaceutical asset divestiture projects.

A more complete picture of C-Bridge Capital and Fu Wei's strong ambition for M&A can be pieced together from the acquisition of Hugel, the largest listed medical aesthetics company in South Korea.

In May 2021, Bain Capital, the original controlling shareholder of Hugel, announced its intention to sell its controlling stake. Through three months of extreme operations, C-Bridge Capital, in cooperation with South Korea's GS Group and Mubadala, completed the acquisition of 46.9% of Hugel's shares for 1.7 trillion won (approximately 9.43 billion yuan). C-Bridge Capital was not the highest bidder, but ultimately Bain Capital chose C-Bridge Capital.

Hugel is the largest overseas M&A target of C-Bridge Capital to date. The success of this deal greatly honed C-Bridge Capital's courage in overseas M&A. The key reason for its success is that the other party valued the global platform that C-Bridge Capital had built over the years.

Hidden champion enterprises with absolute advantages in technology and products must enter the most booming markets. With product portfolios of the same gene, the market can be expanded on a large scale. This multiplier effect is extremely attractive.

Founded in 2001, Hugel's multiple medical aesthetics products hold the top market share in South Korea. Due to the ceiling of the domestic market, it set an overseas expansion strategy early on. In 2021, Hugel submitted a listing application for its blockbuster product, Jeuveau, to the FDA in an attempt to enter the US market. However, it hit a wall twice due to production facility management issues. C-Bridge Capital helped Hugel solve this shortcoming in the shortest possible time.

After the acquisition, C-Bridge Capital invited Brent L. Saunders, a leading figure in the global medical aesthetics industry and the former chairman and CEO of Allergan, to Hugel. He successfully created the success of Botox and Juvéderm. In 2023, it appointed Suk - yong Cha, the former chairman of LG H & H, as the chairman of the board and executive chairman. He is also a legendary figure in the South Korean business community. Suk - yong Cha created a record of 62 consecutive quarters of performance growth at LG Household & Health Care Group. His departure was regarded as the biggest loss for LG Household & Health Care Group by South Korean media.

C-Bridge Capital's greatest contribution to Hugel is global expansion, expanding from the previous 30 countries to more than 60 countries and regions. In Hugel's latest 2024 financial report, its net sales reached 373 billion won (1.9023 billion yuan), a year - on - year increase of 16.7%; its net profit was 142.4 billion won (726.24 million yuan), a year - on - year increase of 45.8%.

The case of Hugel once again proves the feasibility of C-Bridge Capital's "investment + operation" model, and C-Bridge Capital has started to challenge more difficult deals.

HiSun Biotech is C-Bridge Capital's first cross - border pharmaceutical asset divestiture project. First, they divested the Chinese business of Takeda's hypertension and diabetes drugs acquired in March 2022 to build C-Bridge Capital's chronic disease drug platform and continued to introduce blockbuster drugs such as Rocephin and Stilamin. At the same time, they hired a new CEO, optimized the sales team, and are also conducting their first Southeast Asian M&A project, moving towards the pan - Asia - Pacific market.

It can be found that the targets selected by C-Bridge Capital are all enterprises with high industry status, strong product competitiveness, and stable cash flow, but temporarily in trouble for various reasons. Taking HiSun Biotech as an example, Fu Wei keenly perceived the huge potential of this business in the domestic market, made a decisive move, and completed the acquisition at a relatively low cost. Later, Fu Wei personally participated in formulating the enterprise's strategy, re - planned the product line, and optimized the operation process. After a series of operations, the enterprise quickly turned losses into profits, and its performance increased explosively.

In addition, a main logic for C-Bridge Capital to acquire cross - border assets is to buy regional companies and help them achieve global expansion. C-Bridge Capital itself has a global talent pool with employees from more than a dozen different nationalities and backgrounds.

Today, C-Bridge Capital is not only a capital provider but also an operator. According to the needs of enterprises at different development stages, it provides comprehensive solutions ranging from asset buyouts, structured financing (Ruiqiao Credit Fund) to industrial park infrastructure funds (C-Bridge Healthcare Industry Facilities Platform). More importantly, C-Bridge Capital is almost the only provider of these products in the healthcare field.

The long - standing "minority" situation of M&A investment in the domestic market is being broken, and C-Bridge Capital provides a research sample.