Li Zhu delivers a speech during the 2016 Demo China Autumn Summit in Hangzhou, Sept 21, 2016. (Photo/chinadaily.com.cn)
"There are more than 500,000 engineers alone in the Huilongguan area in northern Beijing," said Li.
He also pointed out that the valuation of a startup in Beijing could be reasonably twice as high for a same project in second- or third-tier cities, where the absence of internet giants would make it difficult for those new companies to find suitable partners on the way of growth.
"Beijing is a very good place for you to start new businesses," according to Li.
The fund set up a 55,000 sq m innovation space in Huilongguan area in Beijing in partnership with Tencent and the district government of Changping. Two months after opening, 70 percent of the space has been inhabited.
As many investment companies tighten up their belts during the current economic slowdown, Li and his fund are not scaling back on investment.
Over the past three years since the fund's launch, it has made investments totaling more than 500 million yuan and is growing at a steady rate.
In the first half year of 2016, the fund invested in 42 companies with a total amount of 150 million yuan. "This is kind of equivalent to 200 million yuan last year since companies are undervalued during capital market slowdown this year," said Li. Valuation of companies are 20 to 30 percent lower than a year earlier, he said.
Li said their investment will increase in the second half of 2016.
"I believe the primary market will take the turnaround next year," Li said.
Li's idea is not without base. "The State Council and other agencies have rolled out policies to encourage more capital to flow to the investment industry, including State-owned companies, banks, and foreign capital. In years to come, thousands of billions yuan will be invested in the equity market."
Li will focus his fund's investment in three fields: the artificial intelligence (AI) and other high-tech products, the cultural and creative industry, as well as consumption upgrade.
As a fund focused in Beijing, he believes "it is enough to make good investments in Beijing only," since Beijing could prevail in all the three fields.
For AI, Beijing has the most talents in China. For cultural industry, 80 percent of China's entertainment programs are produced in Beijing. And there is a big market for consumption upgrade in Beijing-Tianjin-Hebei area.
"We will make careful selection during the slowdown. And once we make our decision, we will continue to invest in them."
