"The Lone Brave" exists not only in "Arcane" but also in China's dynamic and ever-fluctuating venture capital market.

From 2004 to 2006 were remarkable years in China's venture capital history. In 2004, the ChiNext board was launched; in 2005, the shareholding reform fully rolled out; and in 2006, A-share IPOs resumed—giving local venture capital firms, which had been navigating the darkness alone, a glimmer of hope. This period marked the second golden age in the development of China's VC industry.

At that time, Suzhou Industrial Park began planning to drive its development and transformation, launching three major initiatives: "Industrial Upgrading," "Technological Leapfrogging," and "Doubled Growth in the Service Sector." These plans focus on strategically guiding, nurturing, and developing three emerging industries: biomedicine, nanotechnology applications, and artificial intelligence.

Just after the 2006 New Year's Day, the management team of Yuanhe Holdings (the parent company of Yuanhe Chencun, formerly known as "Sino-Singapore Venture Capital," and the sole state-owned investment platform in Suzhou Industrial Park) began discussions with senior officials from the China Development Bank about the possibility of establishing a market-oriented mother fund. The two sides quickly reached an agreement. Jointly launched a large-scale 10 The RMB 10 billion mother fund, the Suzhou Industrial Park Venture Investment Guidance Fund, is China’s first market-oriented RMB-denominated mother fund. 。

In an era when RMB fund-of-funds were scarce, Yuanhe Chencun emerged as the "lone warrior" among China's RMB fund-of-funds in the private equity investment market. As Xu Qing put it: "At that time, there were no established benchmarks to follow—so we had to learn on the job, feel our way forward like crossing a river by feeling for stones, and start from scratch to draft contract terms and due-diligence checklists."

This fund is highly anticipated by Suzhou's state-owned assets. When the Suzhou Science and Technology Bureau and the Investment Promotion Bureau team went overseas to recruit returning overseas talents, Yuanhe Holdings proposed "bringing VC institutions into the park." Every year, multiple events are organized to invite investors to Suzhou to view and select projects. Today, on the eastern shore of Dongsha Lake in Suzhou Industrial Park, a characteristic town led by the fund industry, 267 equity investment management teams have settled in, establishing 563 funds, with a total capital aggregation exceeding 289.6 billion yuan.

Similarly, this fund has also faced challenges throughout its lifespan, witnessing the rise of local venture capital firms as well as the transformative changes in the capital markets. "It’s been a journey of both learning and navigating pitfalls," said Xu Qing. "By stepping into those rough spots, we’ve gained invaluable insights—learning how to mitigate risks and craft effective investment strategies. These lessons have now laid a solid foundation for the investment and management of our subsequent fund rounds."

Facing the volatile equity investment market, pioneering "lonely warriors" must possess sharp market insights and the ability to swiftly adjust their investment strategies. "Around 2011, we noticed that prices in the primary and secondary markets were already converging—meaning the previous 'stampede' toward Pre-IPO investments had lost its effectiveness. As a result, we were among the first in the market to advocate investing in funds focused on niche industries." , rather than purely chasing market price differences. “Xu Qing said.”

After the concept of the "Industry Focus" team was introduced, the journey to uncover "dark horse GPs" officially began. In Xu Qing's view, a fund-of-funds investing solely in "white horse" firms holds no real value—its true mission lies in identifying, nurturing, and supporting exceptional fund management teams, leveraging their expertise to drive China's technological innovation and foster the growth of the real economy.

As of today, this flagship fund management firm has been in operation for 16 years, managing a total of 26.4 billion yuan in assets and having invested in 155 funds across 80 different fund management teams. How has the journey been in securing continuous funding along the way? How can one navigate through market cycles? And how can investors clearly define their strategies amid market volatility? To explore these questions—and gain insights into the future of China’s venture capital landscape—Titan Media’s Venture Capitalist series is pleased to present an exclusive interview with Xu Qing, Managing Partner at Yuanhe Chencun.

Talking about fundraising: China's market lacks "long-term capital."

Titan Media Venture Capitalist: For GPs, raising capital is always a challenge—so, for an "established" fund-of-funds like Yuanhe Chencun, which has been around for 16 years and manages assets worth 26.4 billion yuan, does the difficulty of fundraising still exist?

Xu Qing: Raising capital for a fund-of-funds has never been easy. While GPs often see waves of opportunities as market conditions and policies fluctuate, fundraising for fund-of-funds has consistently remained a challenging endeavor. At its core, the Chinese market lacks "long-term capital"—investors willing to commit for the long haul and pursue stable returns.

Today, the structure of investors in the market has undergone a noticeable shift: private capital and high-net-worth individual investors are steadily declining as a share, while state-owned capital is gradually increasing.

The decline in private capital can be attributed, on one hand, to the economic downturn, which has put financial pressure on private entrepreneurs. On the other hand, previous investment setbacks have made private investors more cautious about entering equity markets. Meanwhile, with the rise of tech-focused investments—characterized by their long time horizons and slow return cycles—private capital is starting to tighten up.

Currently, there are four main types of capital in the market: First, local government-guided funds—these represent the "largest" pool of capital currently available. Second, state-owned capital, which comes with relatively high investment requirements, mandates strong alignment with core business operations, and demands robust management involvement and active participation. Third, insurance capital—China has consistently encouraged insurance firms to enter the private equity investment market through policy initiatives. Finally, a more unique category involves industrial capital from leading enterprises, which is entering the primary market as Corporate Venture Capital (CVC). From a fundraising perspective, this type of capital is particularly challenging to secure.

The ease of fundraising is closely tied to the liquidity of funds in the market. In 2006, when Yuanhe Chencun raised its first-ever fund-of-funds, it only had two cornerstone investors: Yuanhe Holdings and China Development Bank. At the time, raising capital in the market was virtually impossible—partly because few players understood the concept of a fund-of-funds and couldn’t grasp why they should allocate assets to this type of investment, and partly due to the long lifecycle of such funds, which typically spans around 12 years.

Until the second half of 2016, when the banking sector entered the scene, equity investment experienced a surge, making it easier for funds to be raised. As a result, we quickly secured 7.6 billion RMB for our third fund-of-funds, with investors including SPDB, ICBC, and the National Social Security Fund, among others. However, shortly afterward, new regulations on asset management were introduced, leading banks to tighten their funding policies. Consequently, liquidity in the market once again became scarce, and fundraising difficulties persisted. 。

Titan Media Venture Capitalist: Early-stage investments carry certain risks—could the limited involvement of insurance capital be driven by risk-averse sentiment?

Xu Qing: I don’t think it’s entirely a matter of risk, Risk is never managed through choices alone—insurance funds always involve "big money," and the way to protect such substantial assets is through strategic asset allocation and portfolio diversification.

For asset allocation, alternative assets typically account for no more than 10%, and equity investments, while part of the alternative asset category, represent an even smaller overall share. However, compared to other asset classes, they are considered high-yield options—driving overseas insurance funds to increasingly allocate capital into primary-market opportunities.

Why does China’s insurance capital allocate relatively little to alternative assets? The core reason is that in recent years, investors had extremely high expectations—and demands—for immediate returns.

If you invest in funds, you may not see any returns for 2 to 3 years. Meanwhile, a fund-of-funds is an even longer-term investment category—typically yielding little or no money back for the first 3 to 5 years. This can put significant pressure on insurance capital, which is why insurers are often reluctant to allocate resources to it. However, from the perspective of how fund-of-funds operate, they offer relatively stable returns with lower risk, making them a solid fit for asset management strategies.

I believe a balanced asset allocation should include both long-term and short-term components—but it’s unrealistic to expect every single dollar to deliver both immediate returns and sustained long-term benefits. That, after all, creates a fundamental contradiction.

Additionally, when it comes to Chinese thought and culture, people tend more often to handle tasks themselves or hire others to do them—there isn’t the same deep-rooted trust in outsourcing or relying on professionals. This reflects a natural stage in the evolution of societal development.

From a long-term allocation perspective, a gradual upward climb is also necessary—after all, the entire market will still require time and patience.

Titan Media Venture Capitalist: How much longer will it take for "long-term capital" to stabilize in the Chinese market?

Xu Qing: Time is hard to predict—it’s a process where quantitative changes eventually lead to qualitative transformation. Remember when RMB funds were just getting started? Back then, the first wave of private entrepreneurs weren’t exactly enthusiastic about investing in funds; instead, they preferred to invest on their own, believing that if their businesses thrived, their investments would naturally succeed as well. But history proved otherwise. As a result, they began looking to annual rankings of investment firms and investors to identify specialized institutions worth backing—a clear shift toward embracing professionalism and adopting a "long-term capital" mindset.

In addition to generational shifts, people from the 1970s and 1980s preferred to handle tasks themselves, while those born after the 1990s are more inclined to outsource and rely on professionals. Meanwhile, individuals are gradually adjusting how they manage and allocate their finances.

Discussing Management: Investment Strategies and Post-Investment Practices

Titan Media Venture Capitalist: You’ve mentioned “asset allocation” several times—is this the core keyword for the fund-of-funds’ operations?

Xu Qing: We don’t use “asset allocation,” Using a diversified portfolio—spanning across years, industries, product categories, and individual funds—we aim to create a well-balanced mix. While this approach may slightly reduce potential returns, it ensures stable, consistent performance overall. We avoid chasing trends or pouring massive investments into a single sector. This is the core principle guiding our fund-of-funds strategy.

Our LPs are mostly state-owned institutions, and for them, the most important thing is to maintain steady returns—rather than chasing quick riches. That’s why we need to stick to a consistent, adaptable strategy that remains unchanged amid rapidly shifting economic cycles and industry trends. Our goal is to ensure that returns consistently outlast market fluctuations, delivering stable, long-term performance.

Titan Media Venture Capitalist: What is Yuanhe Chencun's investment portfolio strategy?

Xu Qing: First is PSD Investment Strategy Portfolio ， The Primary investment strategy is the core, while the Secondary strategy serves as the most important complement to asset allocation. Additionally, the Direct Investment strategy allows for effective follow-on investments in standout projects.

Second is the industry portfolio, Focusing on technology and digitalization as the core underlying capabilities to drive upgrades across both consumer (C-end) and business (B-end) industries—this is the central investment priority for industry investors. The portfolio allocation is structured as follows: 30% allocated to healthcare, 20% to consumer sectors, and 50% to software, hardware, and B2B-related industries.

Third, the stage combinations of "early" and "late" diverge, Funds are increasingly concentrated in early-stage Series A and Pre-A rounds, as well as later-stage M&A activities, while securing Series B and C funding is becoming relatively more challenging. This reflects the overall trajectory of industry development, and our investment strategy is continuously adapting in response to evolving market dynamics and environmental shifts.

Fourth, it's about combining teams with different characteristics. ， The traditional White Horse team focuses on delivering steady, reliable returns, while the emerging Dark Horse team is positioning itself to shape the future of the industry. Based on different types of GP The core value of the fund-of-funds lies in its ability to strategically assemble diverse industry chains, creating an integrated resource network ecosystem.

Titan Media Venture Capitalist: How does a fund-of-funds conduct post-investment management?

Xu Qing: Currently, we manage assets totaling 26.4 billion, having invested in 155 funds across 80 fund management teams. Starting from the second-phase master fund, we’ve established a robust post-investment management system, which is divided into two key components: First, a digital mid-platform that collects and organizes data from both our portfolio GPs and individual projects, building a centralized data hub that is then shared transparently with LPs. Second, a refined management approach tailored to the unique characteristics and stage-specific needs of each GP, enabling us to adopt a personalized, flexible, and effective governance model. This ensures transparency, efficiency, and adaptability in our post-investment activities.

Speaking of GPs, from the perspective of a fund-of-funds, investing solely in "white-horse" companies wouldn't make sense—so we will… Unearth, nurture, and accompany outstanding fund management teams, leveraging their expertise to drive China's technological innovation and strengthen the real economy.

Uncover the latest, most promising, and industry-savvy "dark horse" teams—empowering them with expertise in investment, fundraising, internal team management, and post-investment oversight. Help these teams grow from small funds into market-leading "white horses." Ultimately, GPs and LPs must thrive together, supporting each other every step of the way.

Titan Media Venture Capitalist: We’re truly a wonderful fund-of-funds—our strategy isn’t about picking only the top performers, but rather uncovering teams with even greater potential and value.

Xu Qing: I also want to pick the best, but I can only focus on a portion of it. When it comes to investing, you still need to have passion—it’s not just about chasing returns. From its inception, Yuanhe Chencun has aspired to become a benchmark company in the industry—not by striving to lead in terms of performance, but by setting itself apart as an organization that upholds integrity and principles, contributes positively to the venture capital ecosystem, and fosters healthy, sustainable growth as a master fund.

LP and GP are partnership entities positioned at different points along the capital chain, with equality and mutual success forming the foundation for their long-term collaboration. Yuanhe Chencun’s slogan is "Being the Most Reliable Investment Management Partner"—reliability reflects our own high standards, while investment management remains the core of our business, and partnership defines the nature of our relationship.

Titan Media Venture Capitalist: How can you identify a "dark horse" without supporting data?

Xu Qing: The key elements of a dark-horse team are a promising track, strong industry investors, and personnel with solid investment experience.

First, the track must be large enough to create opportunities; second, having founding partners with deep industry experience is crucial—people who come from the industry itself are invaluable. They have a clear understanding of the sector’s overall evolution, the practical implementation of products, and innovation, enabling them to pinpoint exactly where users’ experiences and needs lie.

Finally, there’s the focus on the team’s methodology—such as how to consistently identify high-quality deal opportunities, how to evaluate industries, pinpoint project strengths, and assess the founding team, among other concrete, actionable approaches. A well-documented, traceable methodology is the foundation that ensures sustainability, and historical performance alone has never been the sole criterion for identifying a superior GP team.

Moreover, for every team to thrive in the vast ocean of investment, it must identify the niche that’s perfectly suited to its strengths—this is the clear "brand" that every fund manager needs to define.

Titan Media Venture Capitalist: Which type of GP do you prefer?

Xu Qing: With extensive industry experience and concurrent investment expertise GP 。 In today’s era of industrial investment, the focus is on backing a product throughout its entire journey—from design and R&D to final production and even post-sales operations. To succeed, investment teams must possess a deep understanding of the industry, enabling them to effectively translate technological innovations into real-world applications, assess whether these innovations meet market demand, and determine if they can address critical pain points within the broader industry ecosystem.

Titan Media Venture Capitalist: When was the concept of "industry focus" introduced?

Xu Qing: The "industry focus" concept was introduced in 2011. When the first mother fund was established in 2006, there wasn’t yet a clearly defined investment strategy—after all, the market was still in its early stages, and there weren’t many GPs to choose from. As a result, the fund primarily allocated capital to blue-chip GPs.

Titan Media Venture Capitalist: How should we view secondary fund transactions?