Annabelle Long, founding managing partner of Bertelsmann Asia Investments (BAI), took eight years to make the strategic investment arm of media company Bertelsmann in China a top venture player.
Mention BAI to any entrepreneurial-spirited person in Beijing or Shanghai, the name needs no introduction.
Compared to IDG Capital Partners and Matrix Partners, BAI, founded in 2008, was able to establish the kind of brand recognition and track record in China rivaling its older and bigger peers.
In the past eight years, Annabelle Long led BAI to invest in over 60 companies, including BitAuto Holdings, fashion e-commerce start-up Mogujie, tech hiring service Lagou.com, female healthcare mobile app Dayima and fitness app KEEP.
Long started her career as a radio host in Sichuan province after graduating from the University of Electronic Science and Technology.
She went on to attend the Stanford Graduate School of Business, before joining Random House in New York in 2005 and started her investment career at Bertelsmann Digital Media Investments.
In 2007, Long returned to China to lead Bertelsmann’s strategic development in the Chinese market, and founded BAI the next year.
As the strategic investment arm of Germany’s Bertelsmann in China, Beijing-based BAI is primarily focused on investing in the new media, Internet & mobile Internet, online education, and new technology sectors.
Two of BAI’s portfolio companies, BitAuto, the Chinese market leader for automotive e-commerce, and Yoho, a cross-media youth lifestyle platform, have gone on to list on the New York stock exchange.
BAI, which currently manages US$1 billion, has more time to screen investments and be more active helping companies grow, Long told Chinese media.
With parent company Bertelsmann the only limited partner in the fund, BAI is free from the burden of having to raise funds constantly, nor is it limited to the typical ten-year fund life.
"This is a luxury in the investment world, and it liberates our team’s productivity to focus on one thing: investment," Long told Chinese media during an interview.
Because of this unique background, BAI’s investment strategy is different from other venture funds that screen hundreds or even thousands of start-ups to make one or two investments.
BAI, currently with a team of ten (and seven are women), would study one industry and its players carefully, then zero in on one investment target.
Once a decision is made, BAI is "all-in". The firm usually invests in companies for more than one round. In Mogujie, for example, BAI invested in the company’s series A to E rounds – a total of five rounds.
"My criteria for evaluating investments includes three measures: absolute returns, annualized rate of return and the above two measures’ consistency," Long said.
A venture fund need to be examined by its ten-year or twenty-year return numbers, not just one or two successes, she stated without revealing BAI’s current rate of return.