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Making it in venture capital


STAR venture capitalist Jenny Lee is often called an investor with a Midas touch - with good reason.

The Singaporean, a managing partner at GGV Capital - and the only woman in a team of managing partners - has led GGV in a number of successful China technology investments that have become unicorns, the all-so-desirable companies that breach US$1 billion in value. For Ms Lee, some of her investments are unicorns many times over.

She was involved, for instance, in GGV's investment in Xiaomi, one of the world's largest smartphone manufacturers, and reaped huge dividends on the back of the boom in the mobile Internet space. She also invested in YY, a China live-streaming social media platform which the firm exited in 2017 for a 15 times return. And more recently there is LingoChamp, listed earlier this year, which taps artificial intelligence in a language learning app that teaches Chinese people to speak better English.

Ms Lee was the first woman in the top 10 of Forbes Midas List in 2015, a data-driven ranking of the world's top 100 venture capitalists based on exits above US$200 million, and private companies valued at US$400 million or more over the past five years. Since then, she has consistently made the Midas List. Some of the traits that make her tick are a dogged perseverance, a genuine passion for entrepreneurs and the humility to never underestimate the competition. "I assess my strengths and weaknesses very honestly. When I enter a new market or area, I always start from ground zero, always assume that I have to fight to win," she says.

Market voices on:

She believes that valuations in the VC space are not demanding at the moment, although the market is in "slowdown phase". One factor is the uncertainty over which area would drive the next big investment wave. There are two obvious candidates - the electric vehicle and artificial intelligence, or what Ms Lee calls "AI-plus".

Our At the Helm column offers insights into Ms Lee's career and how she uses "pattern recognition" to spot entrepreneurs with potential.

In this edition, we look into aspects of asset management that add genuine value to investors' portfolios. In Spotlight, we examine multi-asset funds, a segment of fund management that has attracted a surge of inflows since the 2008 crisis. The funds invest not only in stocks and bonds, but also in a range of other assets including commodities and property. The funds' diversified approach appears to have helped to preserve value. Based on Morningstar Direct data for the month of October when markets tanked, multi-asset funds registered for sale in Singapore delivered a median return of minus 5 per cent, compared to minus 7 per cent for the MSCI World Index.

In our Roundtable, asset managers discuss the importance of sustainability in the investment process, which goes beyond applying ESG (environment, social, governance) metrics in stock selection. For Amundi Asset Management, for example, responsible investment is one of its founding pillars, and has become the "new norm", says Thierry Bogaty, Amundi head of SRI expertise. "Responsible investment helps to identify risks that could have an impact on performance (reputational, operational, financial or regulatory risks)... ESG today really does matter and investors cannot be agnostic on this matter."

In Trusted Adviser, we highlight a fairly nascent segment of funds investing in "positive impact equities". Victoria Leggett, head of responsible investment of Union Bancaire Privee's asset management arm, says companies in the portfolio must generate revenues from offering solutions to the world's problems such as scarce resources, poverty and climate change. Such funds are seen as the "second chapter" of impact investments, which are typically accessible only as investments in private companies or private equity.

Elsewhere, Denise Lim of PwC Singapore examines the ways in which institutions can fight financial crime. She argues that as financial crimes grow in sophistication, an effective approach needs a convergence of the disciplines of cyber security, anti-fraud, and anti-money laundering (AML).

Meanwhile in Ultra Wealth, Tara Loader Wilkinson writes of a little known passion of the late operatic tenor Luciano Pavarotti. Thanks to a gift of a box of paints, he created 60 paintings of still life and street scenes, that now hang inside his former house in Modena, which has been made into a public museum.

Now, limited-edition painting boxes of prints of Pavarotti's best artworks will go on sale later this year, to help fund the staging of full operas through the Fondazione Luciano Pavarotti. The foundation aims to support talented young singers to make their first steps in the opera world.

We wish you a rewarding investment journey, and a promising 2019.

Genevieve Cua
Wealth, Editor