CPPIB, Hillhouse, and Caixin Global bring market participants together to discuss investing in China for the long-term
BEIJING, CHINA (November 27, 2017): As part of a commitment to investing in and supporting sustainable growth in Chinese businesses, Canada Pension Plan Investment Board (CPPIB), Hillhouse Capital Group, and Caixin Global hosted a roundtable discussion on the topic of long-term capital allocation across different stakeholders in the Chinese markets. Market participants, including corporate leaders, investors, and regulators, met to share research insights and best practices related to “long-termism,” the idea that long-term horizons allow for significant value creation.
In anticipation of the Roundtable, a study was commissioned to understand attitudes toward long-termism by Chinese companies and how this translated into corporate behaviors. Caixin Global and Caixin Insight Group surveyed more than 180 listed Chinese companies in 28 industries, comprising a total market capitalization of US$2.41 trillion.
“The findings of this survey show that corporations in China have long-term aspirations, though this mindset can be impacted by various performance pressures. For instance we found that while Chinese businesses were reasonably good at thinking long term, the capital markets generally are not, leading to a disconnect,” said Mark Machin, CEO of CPPIB, “Nurturing long-term corporate behavior therefore requires concerted and coordinated action among all market participants. CPPIB is a long-term investor in China, and we are well positioned to contribute to fostering a long-term oriented market environment that supports our partners, portfolio companies and ultimately benefits the CPP Fund. This survey is the first step to encouraging investors and companies to work together to promote long-term value creation and strategic planning in China which will help to create more global champions.”
“I am a firm believer in investing for the long-term. It is Hillhouse’s goal to build businesses that produce sustainable growth across multiple decades,” said Lei Zhang, Founder and CEO of Hillhouse Capital Group, “As an investor, this means partnering with and helping the best management teams to invest in R&D, talent, and innovation. Creating an ecosystem of like-minded, forward-thinking entrepreneurs, investors and allocators will further support the development of globally competitive businesses in China for generations to come.”
The findings suggest that the majority of Chinese companies have a long-term focus. Moreover, a majority of respondents agree on the importance of stable leadership and incentives aligned with long-term results. The survey findings indicate a joint effort is required among all market participants to foster long-term thinking in China.
“The findings of our survey sparked more thinking to study corporate behaviors as the major market players,” said Shuli Hu, Founder of Caixin Global and Caixin Insight Group, “By collectively addressing the questions raised, we hope to see Chinese corporates really thrive and truly become global champions.”
About Canada Pension Plan Investment Board
Canada Pension Plan Investment Board (CPPIB) is a professional investment management organization that invests the funds not needed by the Canada Pension Plan (CPP) to pay current benefits on behalf of 20 million contributors and beneficiaries. In order to build a diversified portfolio of CPP assets, CPPIB invests in public equities, private equities, real estate, infrastructure and fixed income instruments. Headquartered in Toronto, with offices in Hong Kong, London, Luxembourg, Mumbai, New York City, São Paulo and Sydney, CPPIB is governed and managed independently of the Canada Pension Plan and at arm's length from governments. At September 30, 2017, the CPP Fund totalled C$328.2 billion. For more information about CPPIB, please visit www.cppib.com or follow us on LinkedIn or Twitter.
About Hillhouse Capital
Founded in 2005, Hillhouse Capital is a firm of investment professionals and operating executives who are focused on building and investing in high-quality business franchises that achieve sustainable growth. Independent proprietary research and industry expertise, in conjunction with world-class operating and management capabilities, are key to Hillhouse Capital’s investment approach. Hillhouse Capital partners with exceptional entrepreneurs and management teams to create value. Hillhouse Capital invests in the consumer, technology, media and telecommunications, healthcare, advanced manufacturing, financials and business services sectors in companies across all equity stages. Hillhouse Capital and its group members manage more than US$30 billion in assets on behalf of institutional clients such as university endowments, foundations, sovereign wealth funds, and family offices.
About Caixin Global & Caixin Insight Group
Caixin Global is one of the most respected sources of macroeconomics, finance and business intelligence about China. Tailored for industry professionals, China watchers, business leaders, policymakers and international institutions, Caixin Global's intelligence arm offers policy analysis, industry monitoring, and in-depth research with indispensable insights about Chinese economic policy and its financial markets. Caixin Insight Group (CIG) is a sister company of Caixin Global, a financial information service platform tailored for institutional and professional clients, providing independent investment research, financial databases, index products, and securitization services.