Primavera Capital Holds 2024 Global Investment Conference

The Primavera Capital 2024 Global Investment Conference was recently held in Singapore. This was the first time Primavera Capital hosted its investor conference in the country, bringing together nearly 200 business partners from Primavera’s community around the world for two days of discussions and networking opportunities.

The speakers at this year’s event included notable figures such as Kishore Mahbubani, a distinguished diplomat from Singapore and former President of the United Nations Security Council; Nobel laureate Prof. Michael Spence; Jeffrey Jaensubhakij, Chief Investment Officer of GIC; Yang Peng, CEO of Ant International; Zhang Lei, Founder and CEO of Envision Group; Brian Gu, Vice Chairman and President of XPeng; and Patrick Walujo, CEO of GoTo.

Renowned figures from the global political, business, and academic communities, along with leading entrepreneurs and top executives from investment institutions, gathered to discuss the opportunities and challenges amid global geopolitical trends, macroeconomic fluctuations and emergence of impactful new technologies.

Global Geopolitics Enters a “Hairpin Bend”

With less than a month until the U.S. presidential election, the future direction of global geopolitics is drawing the attention of capital markets. In a fireside chat, Dr. Fred Hu, founder of Primavera Capital and Kishore Mahbubani, discussed the outlook on U.S. China relations.  Viewing the next 10 to 20 years as a critical period for the relationship, Mahbubani suggested that the evolving global geopolitical landscape is entering a near 180-degree sharp “hairpin bend”.

The all-around competition between China and the U.S. marks a significant shift in global geopolitics, shared Mahbubani, who noted that the bipartisan consensus in the U.S. has reinforced this dynamic. The world is at a critical turning point, with greater changes anticipated in the coming years than the last 3,000.

However, Mahbubani emphasized that this tension must be understood within a broader global context, where the world is transitioning into a “3M” era – multi-civilizational, multi-polar, and multilateral – signaling the end of Western dominance and the rise of other global civilizations like China, India, and Islamic nations. International, multilateral cooperation is essential for addressing global issues like climate change, pandemics and navigating this complex geopolitical landscape, he added.

Both experts recognize that ASEAN is a critical emerging region, with its economic growth, political influence and diversity making it a key player in global affairs. Singapore, in particular, plays a unique role in ASEAN as a unique geopolitical and economic bridge between the East and the West.

Technology and Education Investment: Backbone of China’s Economic Resilience

China’s macroeconomic challenges were another focal point for the conference attendees. In a fireside chat with Dr. Fred Hu, Nobel laureate Prof. Michael Spence commented that China’s deflationary pressures, the property crisis, and local government debt are hindering economic growth. To stabilize the economy, he sees the need to address household balance sheet issues, support the private sector, and invest in human capital and innovation. Prof. Spence also said that consistency in government policy towards the private sector is vital to restore confidence across all sectors.

The speakers agreed that investing in technological innovation and education is key to China’s future resilience. Despite short term challenges, China is well positioned in these key areas of investment. China’s domestic consumption is also seen as an area requiring attention, given that its consumption-to-GDP ratio is relatively low. To stimulate demand, it is essential for China to increase household income, reduce taxes, and provide a better social safety net.

Regarding market concern over the Federal Reserve’s interest rate policies, Jeffrey Jaensubhakij, GIC’s Group Chief Investment Officer, believes that U.S. inflation is transitory and interest rates should normalize soon. The normalization will benefit the global economic recovery, but he cautioned that the risk of a potential recession remains, albeit with a lower probability.

Both experts agree that despite short-term issues such as deflation and the real estate crisis, China remains a major contributor to the global economy. The long-term thinking behind the so-called “patient capital” philosophy is particularly important. Investors need to support companies with enduring competitive advantages and entrepreneurs who are capable of navigating changing environments.

AI and the Energy Transition: Planting the Seeds for the Future

Artificial intelligence and the green transition were the two most prominent industry topics at this year’s conference.

Dr. Fred Hu, Kishore Mahbubani, and Prof. Michael Spence engaged in an in-depth discussion on the potential for artificial intelligence to transform industries and boost productivity. They believe that AI’s role in revolutionizing sectors, such as biotechnology, supply chains and energy, will yield significant economic benefits. Public attention on artificial intelligence should be directed towards the changing nature of work and ensuring equitable access to technology, instead of potential job losses. While the rivalry between major powers is intricate, the investments in key industries today plant the seeds for a nation’s future success.

At the panel discussion on GenAI, Yang Peng, CEO of Ant International; Brian Gu, Vice Chairman and President of XPeng Motors; and Patrick Walujo, CEO of GoTo Group, shared their insights on the boundless opportunities for artificial intelligence in transforming industries like cross-border payments, wealth management, automotive, autonomous driving and cloud computing. AI is expected to boost efficiency, cut costs, and speed up R&D, with the potential to transform entire industries.

At the panel discussion on energy transition, Zhang Lei, CEO of Envision Group, had an insightful exchange with Primavera Capital founding partner William Wang. Zhang Lei shared Envision’s advancements in green hydrogen and the company’s “new coal, new oil, and new grid” sectors. He emphasized that the world is steadily progressing towards carbon neutrality as the cost of green energy significantly decreases. Zhang, however, highlighted that technological advances alone are not enough; policy and financial innovations, particularly in green finance, are essential to scale renewable energy and attract investment.

Diversified Allocation, Patience, and Investment Discipline: More Important Than Ever

Regarding how to navigate the uncertainties of the macroeconomic environment, speakers at the conference outlined their diverse views on strategy as well as hands-on experiences to investors.

The LP panel brought together Andrew Leung, Head of Private Equity and Venture Capital at AIA Group; Liam Coppinger, Head of Private Equity Asia at Manulife Investment Management; and Lily Chan, Managing Director at Goldman Sachs Asset Management. The panel delved into an extensive discussion with Primavera Capital founding partner Kenneth Wong on asset allocation trends in Asia, co-investment strategies, exit strategies, and the interplay between primary and secondary markets. The speakers concurred that diversified allocation, patience, and investment discipline are critical for addressing the intricate dynamics of private equity in the Asia-Pacific market.

At the conference, the Primavera team also shared the firm’s substantial growth and strategic evolution over the past 14 years. Currently, Primavera’s investment portfolio spans private equity, venture capital, and credit investments, with a global footprint in Beijing, Hong Kong, Shanghai, Singapore, and Silicon Valley. The key to Primavera’s growth and success lies in its stable long-tenured team, wealth of experience, as well as shared culture and values. Over the past year, as a member of the UN Principles for Responsible Investment (UNPRI), Primavera Capital has integrated responsible investing into its culture and investment practices and has continued to engage in philanthropic activities, providing a growth platform and a healthy environment for its employees.

Both the global and Chinese economies are at a pivotal juncture. As a research-driven and long-term investment firm, Primavera Capital is committed to closely collaborating with global investors, entrepreneurs, and partners. By combining investment expertise and experience with a global perspective, the firm remains dedicated to identifying opportunities, fostering resilience, charting the course towards the future, and exploring the pathways toward transformation.