DNE Group: Reading the atmosphere

DNE Group (formerly New Ease and D&J) chairman and CEO Sun Dongping believes a key reason for success in China is understanding the government’s vision and leveraging on market trends.

This article is sponsored by DNE Group.

What were your firm’s key events in 2021?

Sun Dongping

We have had several major milestones this year. The biggest was the merger of New Ease with D&J China to form the new DNE Group at the end of the year. From capital market perspective, we raised 10 new fund vehicles in 2021, including core logistics funds, development logistics funds and industrial urban redevelopment funds, with the support of partners like QuadReal Property Group. Overall, we raised $3.3 billion of equity in 2021.

What has the operating environment been like?

We focus on China’s ‘new economy,’ which comprises four platforms: logistics and cold chains; modern manufacturing and life science parks; urban redevelopment and internet data centers (IDC). China’s market is developing incredibly fast, and the operating environment in these segments has flourished and is expected to continue the current growth trajectory. However, the country is experiencing sector imbalance, sectors which are not producing nor contributing real economic growth. The government realizes this issue and is pushing for structural change away from traditional segments to ‘new economy’ sectors to promote and strengthen real growth.

The new economy sectors are attracting attention from domestic and global institutional investors. This creates better value and liquidity for our products but at the same time also brings increased competition from new market entrants. I believe we at DNE, having built a comprehensive platform with expertise across the segments, have a distinguished competitive advantage versus our peers.

What key challenges did you have to overcome?

We have had a lot of challenges, both international and domestic. The changes in the international sphere have impacted the Chinese economy and thus our business. Domestic challenges include the ongoing development and mediation of the government’s policies. They may have preferences for certain industries, like life sciences or medical research, while other regions may have a preference for technology. We need to proactively manage our investment thesis to align both investors’ return profiles and stakeholders’ expectations.

Who or what is most responsible for your success?

People and Partners. People – by that I mean our staff and colleagues who are experienced and respected in our sectors and who are aligned in our goals and social values. The value of understanding what our clients are seeking and what the government is aiming to achieve, and bringing the two together to achieve results. This was one of the key reasons behind the merger of New Ease and D&J to form DNE, to bring the multi-product businesses under the same management team.

Partners – our valued long-term investors who trust and believe in our team, particularly in an investment environment where there are cultural differences – are also key to our success. We appreciate our investors’ trust and collaboration to help us overcome these differences.