Investors are eyeing the "second generation of listed companies"

Not long ago, I caught up with a friend from an investment institution, Friend A, who was fully focused on planning a new business. The concept resembled a private director club, interspersed with study tours, summer camps and similar activities.

This type of offering is far from uncommon in the VC industry, historically existing mostly as a post-investment empowerment service. But A told me that unlike other institutions serving their portfolio companies, their target demographic this time is clearly defined: the second-generation heirs of publicly listed companies. The goal is straightforward: to lock in the next batch of potential LPs in advance through this model, paving the way for future fundraising efforts.

I followed this lead and spoke with several IR professionals. Unsurprisingly, this group has also been marked as a high-priority (potential) target for their outreach. One person admitted openly: "Every day at work, I'm thinking about how to help these second-gen heirs with business transformation and asset preservation."

Targeting the second-generation heirs of listed companies for fundraising is becoming an unspoken new direction among GPs.

Why the Second-Generation Heirs?

From a timing perspective, we are currently in a peak period of leadership transition for publicly listed companies. Setting aside earlier examples, the past month alone has seen multiple cases of "second-generation successors taking over private enterprises":

On June 22, Shanxi Taikang Hi-Tech Energy Saving, a NEEQ-listed company, announced that founder and actual controller Zhang Sihui would step down to serve as general manager, with his 1994-born son Zhang Jiaxu officially taking the position of chairman;

On June 15, Renhe Pharmaceutical completed an industrial and commercial registration change, where founder Yang Wenlong transferred his 73.1137% equity stake in Renhe Group to his 1990-born son Yang Xiao for 0 yuan, making Yang Xiao the new actual controller of the company;

On June 2, Muyuan Co., Ltd. — known as the "Pig Maotai" of the livestock industry — also announced a leadership reshuffle, with newly appointed board members Qin Muyuan and Gao Tong both being core figures of the company's second-generation management team;

On May 30, pharmaceutical manufacturer Zhenbaodao announced the completion of its new board election, with 39-year-old Fang Fuxin, daughter of founder Fang Tonghua, elected as chairman of the company's sixth board of directors;

On May 21, menswear giant Youngor also announced that Li Hanqiong, daughter of company founder Li Richeng, would officially take over as chairman and president.

...

These are just the cases from the past month. Looking further back, Cao Hui, son of Cao Dewang of Fuyao Glass, Yuan Fenni of Bioray Pharmaceutical, Shen Kaifei of Double Arrow, and many others have all completed leadership handovers. The older generation stepping back and the second generation stepping into leadership is becoming an undeniable trend among A-share listed companies.

The logic behind GPs targeting this window of opportunity is not complicated.

In today's primary market, publicly listed companies are undoubtedly one of the most sought-after market-oriented LPs. According to incomplete statistics from Wind, since 2026, around 20 publicly listed companies in traditional industries have participated in setting up private equity funds as LPs, compared to only about 5 in the same period of 2025 — a significant year-on-year increase. For GPs, winning over the second generation means, in a sense, securing access to these listed company LPs in the future.

Of course, even if these heirs have no intention or ability to take over the business in the short term, they are still extremely high-quality fundraising targets as individual LPs.

At a time when insurance capital and institutional LPs are becoming increasingly cautious, while state-owned capital comes with strict investment return requirements, individual LPs have re-emerged as a key area for GPs to compete for. These second-generation heirs combine strong financial resources with industrial connections, and their privileged upbringing has given them the confidence to take bold risks — "courageous," "visionary," and "highly perceptive" are the common traits investors described during our conversations.

Additionally, more than one investor mentioned that this group of young people shares another common characteristic: they are extremely eager to prove themselves.

This reminds me of the recent four-hour interview between Xiang Zuo and Yi Lijing, where Xiang Zuo openly admitted on camera that he was seen as the "unpromisable heir," yet kept trying to prove his worth to his parents. This sense of destiny and desire to prove oneself is far from rare among the second-generation group. And equity investment is undoubtedly an efficient shortcut for them to demonstrate their capabilities.

GPs Want LPs, But Second-Generation Heirs Want to Be GPs

The logic sounds smooth, but in practice, GPs quickly discovered an awkward mismatch.

In the past, whether it was listed companies or high-net-worth individuals, newcomers to equity investment generally chose to start as LPs — that was the path the older generation took. But the new generation does not think the same way. "At the beginning, when they don't understand, you can guide them a couple of times; once they get familiar with the rules and understand how things work, they might just go off and do it themselves," shared investor Simon (pseudonym).

In his view, beyond personal disposition, there is a more fundamental underlying factor at play: market evolution. "In today's hard technology era, the barriers to entry for second-generation heirs to invest have actually been lowered."

This statement sounds counterintuitive at first, but makes sense upon reflection. On one hand, primary market investment directions are now highly concentrated, mostly focusing on the key sectors highlighted in government work reports. On the other hand, capital is flowing overwhelmingly into leading projects. When these factors combine, investing has to some extent become an "open book" game. At this point, what is being tested is not just your research and judgment ability, but more importantly, your resource endowment.

"Nowadays, very few projects are won purely through in-depth industrial chain research. Institutions that can still do this truly deserve the market's respect, as they are upholding the last bastion of professional standards," Simon remarked with a sigh.

As investment shifts from "relying on professional judgment" to "relying on resources to secure deal allocations," second-generation heirs, who hold the industrial resources of listed companies and extensive personal networks, are inherently in a strong position. They do not need GPs to act as intermediaries — they can secure deal allocations on their own.

Simon also noted that the "lowered barrier" also stems from more diversified access to information. The older generation tended to become LPs because there was a clear information gap in the primary market back then. But now, with the rise of self-media platforms like Bilibili, Douyin, and Xiaohongshu, coupled with the explosion of AI technologies, that "information wall" is being broken down.

In fact, several "second-generation heirs of listed companies" have already emerged in the equity investment market as GPs.

The most iconic example is He Jianfeng, the "crown prince" of Midea Group. As the son of Midea founder He Xiangjian, He Jianfeng founded his own firm, Infore Group, early in his career, and established its wholly-owned subsidiary Infore Capital. Today, the institution has become a key industrial investor in South China, managing more than 50 funds with nearly a hundred investment deals, and has backed multiple unicorns including Narwal Robotics and Unisound.

Huang Tao, the second-generation heir of Century Golden Resources Group, represents a different path. Since succeeding his father Huang Rulun as the actual controller of Century Golden Resources in 2018, Huang Tao has been very active in the investment field, directly investing through the group and its subsidiary Tengyun Capital in companies such as Anlong Biological, Yikon Genomics, and Carbonhua New Materials. The names of Century Golden Resources also appeared in the shareholder rosters of two companies that listed on the Hong Kong Stock Exchange last month: Loomo Robotics and UISEE Technology.

For GPs, this could be an awkward situation: you are targeting the second generation's capital, but the second generation is targeting your business. Therefore, winning over their money can no longer rely on traditional fundraising pitches. Instead, GPs need to offer something that can truly impress them — either professional barriers that the second generation cannot bypass, or scarce deal allocations that they cannot access on their own.

Otherwise, sooner or later, these young people will take their seats at the table themselves and become your competitors.

This article is from the WeChat Official Account "ChinaVenture", written by Wang Manhua, and published by 36Kr with authorization.