Core Insights - The A-share market has been warming up since 2025, leading to a significant increase in share reductions by shareholders of listed companies, with a total of 428 companies involved in 1,315 reduction events amounting to nearly 60 billion yuan in the first half of 2025, doubling the figures from the same period in 2024 [1] - The National Big Fund has reduced its holdings in 12 listed companies, primarily in the semiconductor sector, with a total reduction amounting to 4.662 billion yuan and an average return of 7.38 times over an average holding period of 7.62 years [2] - The concept of "the art of reduction" has resurfaced as a focal point in the industry, highlighting the challenges faced by venture capital institutions in timing their exits during a bull market [2][3] Market Trends - The frequency of share reductions has increased, with 270 companies experiencing 544 reduction events in July and 224 companies with 435 events by August 25 [1] - The Science and Technology Innovation Board saw the highest reduction amounts, followed by the Shenzhen Stock Exchange's Growth Enterprise Market, with new material and new consumption sectors emerging as top areas for reductions [1] Investment Strategies - Many venture capital investors express regret over selling shares too early, missing out on significant price increases, while some choose to hold onto shares even after fund expiration, resulting in substantial returns as the market rebounds [3] - To optimize reduction timing and maximize exit returns, some investment institutions are hiring secondary market professionals to guide their reduction decisions [3][4] Industry Dynamics - The core competency of venture capital investors lies in assessing enterprise value rather than predicting secondary market trends, emphasizing the importance of adhering to internal industry rules and respecting limited partners' expectations for returns [4] - The current wave of reductions prompts a reevaluation of the essence of venture capital value and exit strategies, particularly in sectors like hard technology and semiconductors, where companies may still be in critical growth phases post-IPO [4][5] Innovative Approaches - Leading venture capital institutions are exploring "primary + secondary" linked models by establishing private securities investment institutions to acquire shares of companies they previously invested in, allowing them to meet exit needs while still benefiting from the companies' growth post-IPO [5]