As Warren Buffett said: Be fearful when others are greedy and greedy when others are fearful. There is a group of people who go against the wind in the VC/PE industry and in the recent turbulent US stock market.

Invested 23 billion USD in three months.

KKR recently released its Q2 report, and the company's total investment amount reached 37 billion USD in the first half of 2024, a 90% increase over the same period in 2023. In Q2, KKR's investment amount reached 23 billion USD (about 166.2 billion RMB), a sharp increase of 130% year-on-year, making it one of the highest investment quarters in KKR's history.

Earlier, Blackstone also issued its quarterly report, with a very similar trend: Blackstone's total investment in Q2 was 33.7 billion USD, a 73% increase year-on-year.

Since the US Federal Reserve raised interest rates in 2022, the global VC/PE industry has entered a cold winter period, with investment and exit activities sharply reduced. However, these PE giants are eager to show their capabilities despite the high interest rates of the US dollar and the sluggishness of the US stock IPOs.

Blackstone President Jonathan Gray said at the earnings conference: "The increase in transaction volume in Q2 shows that we are making massive investments before the Federal Reserve cuts interest rates or before any signals appear that everything is back to normal."

At the KKR earnings conference, KKR Co-CEO Scott Nuttall also said that so far, 2024 has been a "sweet spot year" for him, with attractive valuations and very easy transactions. In contrast, although the valuation level in 2023 was not high, sellers were generally unwilling to sell assets, resulting in inactive transactions.

It can be said that KKR is either signing investment agreements or on the way to signing them almost every day.

"Opportunities arise. We still believe that the current economic cycle will continue, which is favorable for long-term investors, especially those who have enough funds to deal with inevitable cyclical chaos during political changes," said KKR partner Henry H. McVey.

KKR believes that there are still attractive investment opportunities in the current global macro situation, such as the acceleration of AI's demand for electrical utilities, the realignment of global supply chains, and the increase in labor productivity, which are all important macro investment themes.

For PE funds, the high interest rate era is a great time to buy low. Alisa Wood, a partner in KKR's private equity business, believes that although high interest rates will increase financing costs, valuation levels will also correspondingly decrease, making transactions more profitable. In addition, large corporate conglomerates will be forced to sell non-core businesses to raise funds due to high interest rates, providing a large number of high-quality trading opportunities.

Alisa Wood also believes that today's PE funds rely less on leverage, and outstanding GPs emphasize value creation rather than returns through leverage. Therefore, Alisa Wood's conclusion is that the market turmoil caused by the rapid rate hikes by the US Federal Reserve is more of an opportunity than an obstacle for KKR.

PE giants have already taken the lead in buying the dips.

The goal is to manage 1000 billion USD of assets.

Recently, KKR launched a super fundraising cycle. This is a grand plan focused on expanding core business scale, through 30 investment solutions and three flagship strategies, including North American private equity, Asian PE and global infrastructure, to raise more than 300 billion USD of new capital within the next 12-18 months. The goal is to manage at least 1 trillion USD of assets within five years.

It is reported that Blackstone Group, which was established 9 years later than KKR, has reached a scale of $1 trillion in asset management in 2023.

Craig Larson, head of KKR Investor Relations, revealed at the financial report meeting that the subscription size of Ascendant Fund has exceeded its hard cap of $4.6 billion, which puts KKR in a "very favorable position." He admitted that the only current challenge seems to be to satisfy many LPs who are still seeking capital injection in order to overfund easily, so KKR has to reject some LPs.

Meanwhile, KKR's recruitment plan is also ongoing. According to rough statistics, KKR is currently recruiting nearly 50 positions in various regions such as the United States, the United Kingdom, Japan, India, and Greater China.

Duanbin announced "buying the dip".

Similar to the VC/PE industry, the recent US stock market has also experienced a major headwind. Since July 11, the Nasdaq index has retreated more than 10% from its high, and the stock prices of some leading companies have fallen even more.

As of the close of August 2, Nvidia reported $107.27, a decrease of 1.78%, and the latest market value was US$2.6 trillion. It has fallen by 20% (17 trading days) from its high on July 10.

As of the close of August 2, Intel's stock price plummeted more than 26%, the largest single-day decline since 1982. The company's total market value fell to around US$90 billion, with a market value evaporating more than US$31 billion in one day. The fluctuation of the company's stock price is closely related to the released performance report and market expectations.

While the bearish sentiment in the US stock market is gradually increasing, there are also some "warriors" who are going against the trend.

On the evening of August 2, Chairman of Shenzhen Oriental Harbor Investment Management Co., Ltd., Duan Bin, posted on Weibo that the trend was not good tonight, but the new money still made the trader execute the instructions for averaging buy! Long-term value investment is never "lying down" whether in A shares or U.S. stocks.

Duan Bin said that value investors should know how to distinguish between the "noise of fluctuations" and the "main contradictions of long-term investment." When the logic of the long-term foundation has not been broken, use the belief of "unity of knowledge and action" to stick to our investment. Only one in ten people knows, and even fewer can put it into practice. Only those who combine both knowledge and action can stand out. This is the difficulty of value investing.

On July 31, Duan Bin posted on Weibo that Nvidia fell 7.04% today, and continued to fall after the market closed, approaching the 100 yuan mark. However, when Microsoft announced its earnings, Nvidia quickly rebounded by 2.2% because Microsoft's capital investment in this quarter was $13.873 billion, higher than $10.952 billion last quarter, and it focuses on GPU and AI construction; Azure cloud growth rate in the next quarter will accelerate on a month-on-month basis (returning to 31-32%), and the decline quickly narrowed to above $410. Nvidia also rose by about 5% after the market, and AMD's performance met expectations and rose sharply after the market, which is also advantageous for the semiconductor sector.

Duanbin said that the information conveyed by Microsoft's conference call is very important. There is a real demand for continuous investment in AI, which can generate revenue and profit. This should be the foundation. If AI is a "revolution", AI can really become a new industrial foundation, and this low point of adjustment may be the phased bottom of the Nasdaq's adjustment this year.

From Duan Bin's statement, he expressed his deep understanding of investment and fund management, especially his mentality and strategy in the face of market fluctuations. He emphasized that as a fund manager, the responsibility of managing client funds is heavy, and losses will bring him great psychological pressure. Duan Bin is full of confidence in his stock selection ability and market judgment. Even when the market is unstable, he insists on his investment philosophy.

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