US dollar LPs are back.
It's the AGM season again.
AGM, which stands for Annual General Meeting, is the most crucial annual communication mechanism between investment institutions and LPs. As a convention, the AGMs of US dollar funds are mostly held in the fourth quarter. This year - end ritual has become a barometer of the primary market.
After communicating within the investment circle, it's found that recently, almost all US dollar funds have been busy with this matter.
"Each institution is arranging the schedules of LPs," said a friend from a top - tier US dollar fund in Beijing. "As far as I know, more than ten institutions around me are holding their AGMs at this time." Some even poach US dollar LPs to their own meetings. "Everyone is vying for LPs."
Just as the warming of the spring river starts with fundraising, a long - awaited scene has returned.
At the end of the year, scramble for US dollar LPs
"Compared with the previous two years, the atmosphere at this year's event was significantly more lively, and the willingness to communicate was much stronger," shared John, who had just finished his own US dollar fund's AGM. The LPs were in a relaxed mood. They were overseas investors from the United States, the Middle East, Europe, and other parts of Asia, and there were also many new faces.
John's biggest impression at the scene was that the confidence of US dollar LPs is returning. Some who left midway are considering coming back, and some steadfast ones choose to continue to deepen their investment. "The bosses unanimously agree on the warming - up trend of US dollar funds, and we also had internal discussions and reached a consensus in our institution."
Once upon a time, US dollar funds were the pioneers of domestic venture capital. For 20 years, their profound influence has been deeply rooted in the genes of China's venture capital ecosystem. However, when hard technology became the theme of the era, the themes that US dollar funds were good at in the past faded away. Coupled with the changes in the external environment, this group has fallen into silence to varying degrees.
But things started to change this year. "The global capital's interest in investing in China is at the highest level in the past three years," said a well - known VC investor. He has been intensively receiving research teams from overseas family offices recently, and many foreign LPs who had been on the sidelines have actively come to communicate, hoping to get more information about Chinese technology companies and not miss the opportunity of China's technological rise.
They are investing back in China. The latest example is that Singapore's Hong Leong Group announced that it plans to invest in the third - phase Shanghai Science and Technology Innovation Fund through a QFLP fund with a scale of 500 million yuan, officially deploying in China's science and technology innovation sector. Simply put, QFLP means that overseas funds invest in the domestic market.
"I'm optimistic about the Chinese market," said Jean Eric Salata, the Chairman of EQT Asia, in Hong Kong not long ago. "Clients are seeking diversified investments, and Asia will be one of the main beneficiaries of this trend, especially China."
The water that had once dropped to freezing point is flowing again. A US dollar fund investor revealed that during the AGM season, peers are asking each other for the contact information of overseas LPs of each fund. Even a phone number or a business card is regarded as a precious connection opportunity.
Two barometers
This is a long - awaited scene.
Not long ago, two well - known VCs successively announced their latest fundraisings: Monolith Capital's second - phase US dollar fund and first - phase RMB fund reached the final close, with the total scale of the new dual - currency fund reaching 488 million US dollars; Source Code Capital completed the fundraising of its new growth - stage fund worth 600 million US dollars, also covering both RMB and US dollars.
Although no specific list of LPs was provided, the investment circle learned that the reinvestment rate of Monolith's old US dollar fund LPs exceeded 100%, and the fund was over - subscribed within a month. The LPs of Source Code's new fund are mainly industrial investors and a small number of long - term financial investors who have continued to support it, and the overall duration of the fund is as long as 25 years.
The venture capital circle hasn't seen such a lively scene for a long time. Two VCs with similar styles announced that they had obtained new funds almost at the same time, and the new funds both included money from US dollar LPs.
Actually, this is just the beginning. Previously, it was rumored in the circle that many VCs rooted in the Chinese mainland had launched a new round of US dollar fundraisings, which caused quite a stir in the overseas LP circle. Monolith and Source Code were the first to complete their fundraisings.
According to the latest news, Blue Pool Capital, owned by Joseph Tsai, has also started to raise funds for its PE fund, with a target scale of 750 million US dollars.
Their fundraisings have sent an important signal to the market: when the investment story shifts from model innovation to technological breakthrough, funds that can accurately define and implement this strategy have regained the favor of US dollar LPs.
The mood has been ignited. In the past few years, both US dollar GPs and LPs have been collectively silent and pessimistic. There have been few sounds in US dollar fundraising, and large - scale fundraisings have been extremely rare. But now, different from the past when they either avoided it or adopted a wait - and - see attitude of "only investigating, not promising", IRs clearly feel that US dollar LPs are looking back. Foreign investors are communicating frequently, hoping to get more information about Chinese technology companies.
In particular, they want to increase their investment in Chinese robot projects. "US dollar LPs now think that the future of robots belongs to China, just like the era of electric vehicles," said a PE partner.
In this situation, the same feeling is spreading in the venture capital circle - the US dollar funds are warming up.
The signal also comes from the changes in personnel. Professional headhunters in the VC/PE industry are getting busy. "The demand from institutional clients has increased sharply, especially for the IR positions. The actions are significantly more active than last year," said the managing partner of a medium - sized fund. "The top priority in the next step is to find an IR director who can connect the global LP network. This is more urgent than investing in a star project."
"US dollar LPs have really turned their attention back to the Chinese market," said more than one US dollar investor to us recently. Perhaps looking back in a few years, the silence of US dollar funds in the previous years will prove to be a collective misjudgment.
The best assets are in China
Behind the change in the flow of funds is a profound re - evaluation of value - overseas funds are increasingly aware of the certainty of Chinese technology assets.
In cutting - edge technology fields such as AI, new energy, semiconductors, and biomedicine, Chinese innovative companies are transforming from technology followers to equal competitors. Among them, AI is the most prominent. From the popularity of DeepSeek at the beginning of the year to the emerging AI dark horses in various sub - sectors now, the rise of Chinese artificial intelligence has caught the world's attention.
"If China's leading robot companies were in the United States, their valuations might be five to ten times higher," said Meng Xing, a partner at GGV Capital, recently. Investing in a new generation of Chinese robot startups holds huge opportunities - from automatic lawn mowers to smart coffee machines, these teams are using AI to create new products. These companies benefit from China's rich talent pool, including product managers and manufacturing engineers familiar with large - scale mass production. "China has a complete and mature robot supply chain," he added.
As Jensen Huang publicly sighed, 50% of the world's AI researchers are from China. "If you've been to the offices of Anthropic, OpenAI, or DeepMind, you'll find many top - notch talents from China there." He even made a rare and straightforward statement: "China will win the artificial intelligence competition."
Meanwhile, the strong recovery of innovative drugs has also attracted overseas funds to embrace Chinese assets again. Looking back at this year, a large amount of long - term capital has flowed into the pockets of Chinese biotech companies, and a number of US dollar funds focusing on healthcare have also successively announced the completion of their new - phase fundraisings, which shows the market confidence.
During this period, the soaring market of innovative drugs in the Hong Kong stock market is still vivid in memory. Hu Xubo, the managing partner of Qiming Venture Partners, previously revealed that some international investors regretted not participating in the investment of Chinese innovative drug companies in the Hong Kong stock market and missed this wave of opportunities. "Especially since the second half of last year, the clinical data of a group of Chinese innovative drug companies have been amazing. The industry has found that Chinese companies can do so well."
"Everyone is well aware that China is the world's largest supply - chain country and the world's largest consumer market. Isolation is unrealistic. The world needs us, and we also need the world," said Duan Lanchun, the managing partner of Cathay Capital, at the Zero2IPO Annual Conference.
The cycle is rotating. As Xiao Bing of Fortune Capital said: "Believe in the national fortune and embrace the new round of the 'bull market' of technological wealth creation." In this way, the world's attention has returned to China again, and the consensus that "The next China is still China" has become even deeper.
This article is from the WeChat official account "Investment World" (ID: pedaily2012). The authors are Zhou Jiali and Yang Jiyun. It is published by 36Kr with authorization.