Core Viewpoint - The VC/PE market in 2025 is experiencing a superficial recovery, primarily benefiting top-tier institutions, while the overall market activity remains stagnant, leading to a survival-of-the-fittest scenario for smaller GPs [1][5][10]. Group 1: Market Conditions - The first half of 2025 shows an increase in LP contributions, new fund establishments, and investment numbers, but this is misleading as it mainly reflects the activities of leading institutions [1]. - The concentration of resources among top-tier institutions has intensified, exacerbating the challenges faced by smaller GPs [1][5]. - Many smaller GPs are adopting cost-saving measures, such as shared office spaces, to survive in a challenging environment [2][3]. Group 2: Employment and Cost Management - Cost-cutting has reached a point where some firms can no longer afford to hire interns, indicating a severe reduction in operational capacity [4][5]. - A significant number of firms have implemented salary reductions and layoffs, with many employees facing pay cuts and job losses [5][6][7]. - The overall salary levels in the industry have continued to decline, with a notable drop in the median annual salary for front-line investment managers to 300,000 yuan [6][7]. Group 3: Organizational Changes - Many firms are undergoing significant personnel changes, with a focus on replacing traditional business backgrounds with industry-specific expertise to enhance operational efficiency [10]. - The trend of "survival of the fittest" is leading to a restructuring of teams, with younger investment professionals facing the highest risk of layoffs [10]. - The implementation of performance-based layoffs and salary reductions has become common, even in state-owned enterprises, challenging the perception of job security in these institutions [8][9].

Core Viewpoint - Many small and medium-sized General Partners (GPs) are adopting cost-saving measures such as shared office spaces and reducing staff to survive in a challenging investment environment [1][2][3][4][5]. Cost-Saving Measures - Several GPs have transitioned to shared office spaces to cut costs, indicating that survival is prioritized over maintaining a traditional office setup [1][2]. - The trend of using shared offices is common among small GPs, with many reporting that their business operations have not been significantly affected [2][3]. - Some firms have even eliminated internships, which are typically low-cost positions, highlighting the severity of cost-cutting measures [4][5][6]. Staff Reductions and Salary Adjustments - Interns have been let go across various departments, reflecting a broader trend of reducing personnel costs [5][6]. - Many firms have implemented salary cuts and layoffs, with over half of employees experiencing pay reductions due to the challenging market conditions [8][10]. - The concept of "survival of the fittest" is evident, as firms are adopting performance-based evaluations leading to layoffs of the lowest performers [10][11]. Market Challenges - The year 2025 is seen as a critical year for many GPs, with difficulties in fundraising, investing, and exiting investments becoming increasingly common [9]. - Many firms have drastically reduced travel expenses, opting for online meetings whenever possible, and have set lower standards for travel accommodations [9]. - The emergence of "zombie funds" is noted, where funds are unable to raise new capital or exit investments, leading to a tightening of budgets and operations [9]. Talent and Strategy Shifts - A significant restructuring is occurring within GPs, with many young investment professionals being let go while firms seek to hire individuals with industry-specific backgrounds [15][16]. - The current environment is described as a "hell mode" for new entrants in the investment field, as they face challenges in gaining experience and resources [16]. - The investment landscape is evolving, with firms needing to adapt their strategies and personnel to navigate the downturn effectively [16].