From August 19 to 20, 2020, the "China Bridge 2020 Industry Investment Summit" hosted by Chinese Venture and co-organized by China Bridge Group, China Bridge FOFs Research Institute and China Bridge Capital was held in Shanghai. Investment institutions, industrial capital, family offices, real estate funds, listed companies, unicorn companies, relevant government leaders, industry experts, etc. gather to focus on the trends of industry development and hot topics in industrial investment, and explore the future industrial investment layout in the new economy.

On August 19, 2020, Xin Yong, General Manager of the Strategic Development Department of WINS Investment, was invited to attend a roundtable dialogue entitled "Self-reliance, Value Return Era of Intensive Cultivation of Real Estate Funds". The roundtable dialogue was hosted by Zhao Ke, Assistant President and Board Secretary of CURA Investment. Among the guests participating in the dialogue were Chen Qingyi, Partner of Bulls Capital, Li Li, Senior Vice-President of Hongkun Wealth/General Manager of Asset Management Division, and Li Xiang, Chief Strategy Officer of Greenland Financial Holdings Group, Zheng Fanming, Deputy General Manager of Sino-Ocean Capital/General Manager of Fund Business Center. During the dialogue, Mr. Xin Yong shared his views on topics such as "long-term equity investment of real estate funds", "real estate asset acquisition", and "REITs".

When it comes to real estate funds, fundraising, investment, management and withdrawal are usually talked about. General Manager Xin believes that the essence of fundraising, investment, management and withdrawal is attributable to the investment on the asset side, the ability of asset operation and management, and the ability to match and coordinate the needs on the capital side. From the perspective of the subdivision strategy of real estate funds, based on the investors' capital attribute requirements and risk control requirements, WINS Investment tends to develop towards value-added strategies. After the asset acquisition, the assets are empowered through the operation and transformation of the assets, so that the value of the assets can be increased. While following the value-added strategy, WINS Investment also pays great attention to the equivalence and balance of risks and returns.

With regard to the fundraising, investment, management, and withdrawal capabilities of stock real estate projects, Mr. Xin proposed the concept of "two brains". One brain refers to the control of the core professional team from investment to the monitoring of project operation and management, and finally to the exit of the project. The other brain refers to the ability of the asset management team, and asset management involves refined and coordinated management in such links as positioning, investment promotion, operation and transformation, as well as the market promotion and withdrawal in the later stages, so as to maximize the value of asset management efficiency. With the blessing of the "two brains", the real estate fund is ultimately to carry out intensive cultivation, so as to gain the trust and favor of more long-term equity capital.

In addition, General Manager Xin pointed out that in the current market environment, when facing various business formats of real estate and such links as fundraising, investment, management and withdrawal, we need very much to sincerely cooperate with professional teams in various sub-fields to form the complementary and synergistic development of our respective advantageous resources.

When talking about the acquisition of real estate assets, General Manager Xin introduced the core strategy of “PE+REITs” two-wheel drive of WINS Investment. At the PE stage, when acquiring an asset, WINS can invest a certain amount of capital in the project through private equity funds, and then empower the asset through the value-added operation of the property to stimulate the value of the project. At the REITs stage, under the premise that China's public REITs policy is open and mature, when the assets we acquire and operate reach a stable state, we can issue the assets through public REITs products. WINS Investment follows this strategy and maintains the consistency between asset operation and management performance and the attributes of financial products and investor requirements as a professional principle in the specific process of business execution, forming an efficient unity of capital operation and asset management.

The launch of related documents on infrastructure public offering REITs this year has a positive impact on the entire industry. During the dialogue, General Manager Xin also talked about the impact and significance of future REITs on real estate investment.

First of all, REITs put forward higher requirements on asset quality, acquisition and operation and management capabilities. The guidance document for infrastructure REITs adheres to equity orientation and follows market principles, and clarifies the independent and stable cash flow and structural "risk isolation" attributes of the assets that meet requirements. These requirements are in line with the definition and characteristics of the international mature capital market standard REITs. They will more effectively promote the establishment of a sound development mechanism for real estate stock assets. The process of the issuance of public REITs and subsequent listing transactions is a continuous process in which major participants including managers, custodians, investment banks and financial consultants, intermediaries and investors jointly inspect and supervise the income and effectiveness of the project investment, operation and management, forming a sound development mechanism for asset performance, product structure and investor returns. The income is mainly reflected in the increase in stock price brought about by such factors as regular dividends and net asset appreciation. The successful establishment and issuance of products is as important as subsequent operation and management and value appreciation.

Second, standardized public offering REITs will actually provide a wide range of investors with opportunities to invest in real estate stock assets. From the current point of view, the launch of the infrastructure REITs this time will be largely based on the participation of institutional investors in the short and medium term, while the investment side of a more mature market should be good balance matching of debt and equity investment based on the characteristics of assets and products, providing opportunities for participation in investments with different types of strategies and risk-return requirements, and then enabling the free circulation in the capital market. From the asset side and investment side, public REITs have huge room for development in China. On the other hand, the participation of a wide range of investors through the asset market makes excellent assets and teams more confident, and unsatisfactory projects will face greater challenges and pressures. Public REITs are not universal exit tools, but more transparent and market-oriented financial products.

Third, for original stakeholders and promoters, the strategic effect of the REITs platform is higher than the gains and losses of a single asset project. Based on the requirements of REITs products for project dividend rates, with regard to mature properties under the current market conditions, there will be a high probability of occurrence that the exit value of the REITs product issued or a single project is lower than the exit value of sales to a specific type of investor. According to international operating experience in mature markets, the asset package portfolio strategy effect, diversified financing tools, and lower financing costs and other advantages after the formation of a platform effect of REITs will have more important strategic significance for the continuous and steady development of the investment management platform of the original stakeholders and initiators with a high efficiency of capital turnover utilization. An excellent REITs platform can independently complete the process of fundraising, investment, management and withdrawal and is continuously recognized by the market for development and growth. It is very important to exert the scale and comprehensive professionalism.