DNE Group on investing in China’s new economy

Market segments such as logistics and life sciences provide growth opportunities, despite wider volatility, says DNE Group founder and CEO Sun Dongping.

This article is sponsored by DNE Group.

What were your firm’s key events in 2022?

Sun Dongping

2022 was a critical year for us for several reasons. It was the first year following the merger that created DNE Group. As a newly combined entity, we extracted significant synergies from our combined expertise, management, client base and products. This led to several key milestones, including the closure of a flagship $1.2 billion life sciences fund.

Another major event was the formation of the DNE real estate investment trust, which was listed in October. The Chinese government has been approving C-REIT listings for a number of operators in the market and we were among the few given approval. Our REIT was substantially oversubscribed and, from listing to now, the average gain in value for our investors is around 30 percent.

Of course, 2022 was a difficult year in some respects but we received support from regulators, local government and investors. In total, we raised $2.6 billion in new equity ranging across logistics, industrial sectors, life sciences and more. We closed a number of new transactions throughout the year and aim for this to continue throughout 2023.

What has the operating environment been like?

In terms of the market as a whole, there has been unprecedented volatility but on the new economy side across logistics, life sciences and industrial sectors, there was strong resilience and opportunities for growth.

In 2022, the Chinese government increased its investment to drive internal consumption and create value across the market. This matches DNE’s strategy where we build infrastructure and supply solutions for clients across various new economy segments. This strategy has proven its effectiveness over the last year and our investors are supporting multiple products in these segments.

What key challenges did you have to overcome?

The main challenge concerned how to work around covid restrictions. In effect, Shanghai, Beijing and most major cities in China were locked down to varying extents. So, the most important factor was managing this to drive our business during these periods. We had to find ways to view investments, complete construction projects and conduct asset management.

The restrictions did create some volatility but, overall, new economy segments were very resilient. With regard to logistics, we did see an impact on the movement of goods but, for tier-one cities, their sheer scale meant they were often more insulated from these impacts.

What or who is responsible for your success?

Our people were largely responsible for our success in 2022, with the commitment and dedication of our personnel helping us to achieve key milestones. At the same time, the support, commitment and trust shown by our shareholders and key investors have driven us to work harder to deliver the best possible returns.

Finally, our integrated business model and strategy around new economy assets have also played a major role in our success.