Core Insights - Source Code Capital has completed fundraising for a new growth fund with a total scale of $600 million, focusing on "AI+" and "Global+" sectors, indicating a strategic shift towards long-term investments [5][6][10] - The fund is designed with a 5-year investment period and a 20-year exit period, marking a significant 25-year lifespan for this growth fund, which is a departure from traditional investment timelines [6][13] - The decision to focus on growth-stage investments comes amid a challenging market environment, with a renewed optimism in exit channels, particularly in the Hong Kong IPO market [10][11][18] Fund Details - The new fund's total scale is $600 million, which is smaller compared to previous fundraising rounds of $1 billion and 7 billion RMB in 2021 [16][18] - The fund will concentrate on AI-related investments, including AI2C/2P and the computing power supply chain, as well as global opportunities in smart hardware and software applications [9][10] - The strategy reflects a shift from rapid expansion to a more focused and quality-driven investment approach, emphasizing long-term value creation [17][19] Market Context - The Hong Kong IPO market has shown significant recovery, with total financing reaching HKD 182.9 billion by the end of September 2024, more than doubling from the previous year [10] - The renewed market sentiment has led to a surge in IPO applications and increased trading volumes, creating a more favorable environment for growth investments [10][11] - The shift in strategy by Source Code Capital is seen as a response to the broader market dynamics, aiming to balance fund size with sustainable returns [16][17] Strategic Implications - The long exit period allows the investment team to focus on long-term value rather than short-term financial metrics, enabling a deeper evaluation of a company's competitive position over a decade or more [13][14] - This approach is expected to redefine growth-stage investment strategies, moving away from traditional IPO-centric models towards a more disciplined and patient investment philosophy [13][19] - The fundraising success of Source Code Capital may signal a new phase for investment institutions in China's primary market, emphasizing quality and long-term commitment over rapid growth [19]

Core Insights - The new growth fund by Source Code Capital focuses on "AI+" and "Global+" investment directions, with a total fundraising of $600 million [1] - The fund aims to address critical issues in AI technology and explore global opportunities for China's comprehensive capabilities [1][2] - The investment strategy emphasizes long-term support for innovative companies, with a 5-year investment period and a 20-year exit period, totaling a 25-year lifecycle [4] Investment Focus - The "AI+" focus will target areas such as AI2C/2P and the computing power industry chain, aiming to support breakthroughs in AI technology and its commercialization [1] - The "Global+" focus will explore opportunities in smart hardware and software applications, emphasizing China's global output capabilities [1] Fund Management Strategy - The current growth fund will concentrate on growth-stage projects, while the independently operated "Source Code Rhythm" will focus on early-stage investments [3] - The fund's strategy reflects a shift towards "less but better" project selection, aiming for deep engagement with entrepreneurs and long-term value creation [4] Historical Performance - Source Code Capital manages approximately $7 billion in assets and has invested in over 300 startups since its inception in 2014, covering various sectors including AI, smart manufacturing, and life sciences [5]

Core Viewpoint - Source Code Capital has successfully raised a new growth fund with a total scale of $600 million, focusing on "AI+" and "Global+" sectors, indicating a strategic shift towards long-term, focused investments rather than rapid expansion [2][3]. Part 01: Why Continue "Growth Stage Investment" - The new growth fund will primarily invest in AI-related sectors, including AI2C/2P and the computing power supply chain, addressing critical issues in AI technology development and commercialization [6]. - The decision to focus on growth stage investments comes amid a challenging environment for such investments in China's primary market, where exit channels have been limited, leading to valuation mismatches [7]. - A significant catalyst for this strategy is the recovery of the Hong Kong IPO market, which has seen a substantial increase in financing and market activity, providing a healthier exit environment for growth investments [7][8]. - The fund's 25-year lifespan allows for a shift away from short-term IPO pressures, enabling a focus on long-term value and industry competitiveness [8][9]. Part 02: "De-Expansion" as a New Narrative? - The new fund's $600 million size is smaller compared to previous fundraising efforts, reflecting a strategic choice to prioritize quality over scale amid a declining market environment [10][11]. - This shift indicates a maturation of investment strategies, moving away from the race for larger fund sizes towards a focus on sustainable, long-term investment capabilities [11][12]. - The changes in strategy are particularly relevant for cautious North American LPs, as they seek to engage with top-tier Chinese GPs in sectors like AI and robotics, which present significant structural opportunities [12][13]. - The completion of this growth fund may signal a new phase for investment institutions in China's primary market, emphasizing discipline, focus, and patience in identifying valuable opportunities [13].