Fan Bao's disappearance is a situation no one wanted to see.

By Lili Yu and Muxin Xu

Edited by Jing Liu

Fan Bao's most recent WeChat Moment was posted on January 9, 2023.

It was the day Fenbi, a portfolio company of China Renaissance's New Economy Fund, listed on the Hong Kong Stock Exchange. Bao congratulated founder Zhang Xiaolong in his post, calling it the fund's first IPO — an "auspicious start."

A little over a month later, in the late hours of February 16, China Renaissance publicly confirmed that Bao was "out of contact." The company would continue its daily operations under an executive committee comprising Xie Yijing, Wang Lixin, and other members of senior management.

Multiple sources close to China Renaissance told An Yong Waves that Bao's disappearance was likely related to an investigation involving Conglin, the former chairman of China Renaissance Securities. Conglin came with deep banking credentials, having previously worked at ICBC and ICBC Asia. In November 2007, he joined ICBC Financial Leasing as executive director and president, and in 2016 became chairman and CEO of ICBC International. He joined China Renaissance in July 2020.

On September 6, 2022, Conglin was taken away for investigation. Sources close to the matter told us that his photo vanished from China Renaissance's website that same day, but otherwise the matter was handled with extreme discretion — to the point that many within the company itself were unaware of what had happened. This, in itself, speaks to how little presence Conglin had at the firm.

The same sources noted that although Conglin was nominally in charge of China Renaissance Securities, neither its staffing nor its business activity was particularly prominent. Months earlier, several secondary market professionals An Yong Waves had spoken with had already pointed out that Conglin's troubles would likely spill over to Bao.

Numerous market rumors about Bao are circulating now. But until judicial authorities reach a conclusion, we will refrain from speculating.

In China's capital markets, everyone knows Fan Bao. Especially during the past decade-plus of the mobile internet boom — an era of vast waters and enormous fish — Bao and the China Renaissance he captained, a full-service investment bank that started out in financial advisory, became one of the most formidable players. With his iconic personal brand, his aggressive and prescient dealmaking, Bao was not merely an investment banker or an investor. He was a life idol to many in the industry.

His admirers included his competitors. In interviews with nearly every head of China's major financial advisory firms, An Yong Waves found people consistently describing Bao as "a respected rival," "an unsurpassable predecessor," "a heroic figure." Such praise is rare in the investment world, and especially in the FA business, where firms are essentially dividing up the same pie.

Perhaps no one else could carry the nickname "Boss Bao" quite like him. Even if he was a Shanghai native of not particularly imposing stature.

Personnel Turmoil

In retrospect, the signs were there.

Three days before Bao's disappearance, China Renaissance's securities arm (formerly known as Huajing Securities) experienced a major shakeup in its board and senior management. Its website showed that the chairman's role was being filled on an interim basis by general manager Xiang Wei, while Conglin was removed from the executive list. In total, five people exited the board and management: Conglin, Ma Ning, and Wang Hui stepped down as directors; Dong Jianjin left as supervisor; Cui Qiang exited the executive roster. Xiang Wei joined the board as general manager. New appointees included Tao Jian, Wang Cheng, Chen Yang, and Xin Xin as directors; Zheng Yi as supervisor; and Yang Liyang as an executive and financial officer.

But it wasn't just the securities unit. The broader China Renaissance group had seen considerable turnover in recent years.

One frequently mentioned figure is Du Yongbo. Once a key person at the firm, Du initially handled part of the FA business before shifting focus to investing. But as Bao began personally taking charge of investment activities, Du's position internally became somewhat awkward. His name does not appear on the executive committee list on China Renaissance's website.

In Du's most recent WeChat Moment, he wrote: "Thanks for your inquiries. Please refer to the listed company's official announcements. I will not respond individually."

Another key figure mentioned in the public announcement is Xie Yijing. He is also a co-founder of China Renaissance. One of the bell-ringing photos from the firm's IPO shows just two people: him and Bao. Xie currently serves as a managing director and head of China Renaissance's healthcare team, overseeing healthcare-related financial advisory business. But internal sources have told us that the healthcare team has always occupied a relatively peripheral position within the China Renaissance system.

A representative of China Renaissance's younger generation, Zhou Xiang, who headed Alpha, also departed earlier and subsequently founded Mingde Capital (an FA firm). Bluepha, a synthetic biology company that recently completed a B+++ round, is among his clients.

A look at the "executive committee" representing China Renaissance's highest echelon reveals considerable changes to Bao's inner circle as well.

For instance, Cui Qiang, who exited the China Renaissance Securities executive list in this round, had already stepped down from his securities role some time ago. He is understood to be China Renaissance's current CFO, responsible for group-wide financial management, having joined China Renaissance Securities as CFO in September 2016. The earlier finance head, Wang Xinwei, reportedly left due to health reasons.

In interviews, Chen Yang, who just became a new director at China Renaissance Securities, came up frequently. Born in 1986, she previously worked at Han Kun Law Offices, focusing on private equity and venture capital. In April 2022, she joined the China Renaissance group as chief operating officer, overseeing human resources, legal, and other functions. Because her English name is Diana, she is more commonly known within the firm as "Director Dai." The previous head of HR had long since departed.

Of course, personnel changes are normal for any ongoing enterprise. But to those who consider themselves emotionally invested in China Renaissance, the departure of "the people who built this together" feels like negative confirmation.

Bao once told the media that what he constantly emphasized at China Renaissance was the need to "de-Bao-ize" the firm: "Without Fan Bao, China Renaissance has no past. But with only Fan Bao, China Renaissance has no future."

The Road Ahead

Bao possessed the qualities of a legendary figure: shaved head, not tall, reputedly fond of Brazilian jiu-jitsu and Muay Thai. He was also a decisive operator. What people most relish discussing is the pivotal role he played in a series of new economy companies.

Particularly in 2015, the year dubbed "China's Great Internet Merger," China Renaissance was involved in at least the Didi-Kuaidi, 58.com-Ganji, and Meituan-Dianping mergers, cementing Bao's position as "China's number one new economy dealmaker."

But FA is perhaps a business prone to burnout. This is evident in Bao's later trajectory: over the past five years, whenever discussing China Renaissance, he deliberately downplayed its FA origins. In early 2018, An Yong Waves participated in a small interview where a reporter tried to get Bao to discuss how China Renaissance was "responding to the rise of Taihe and Lighthouse." He was visibly weary of the question.

This was nine months before China Renaissance's IPO. Clearly, Bao no longer viewed the firm as "an FA shop," and indeed its operations had long since outgrown that label. When China Renaissance listed on the Hong Kong exchange, it defined its three pillars as: investment banking, investment management, and Huajing Securities. This structure closely approximated the model of a "global bulge-bracket investment bank."

From Bao's investment of energy in subsequent years, he seemed quite determined to become a respected investor. In September 2020, we interviewed Bao specifically to discuss his "investor" identity. At the time, China Renaissance had achieved strong results in projects like Beike Zhaofang and Pop Mart. Pop Mart founder Wang Ning even offered us a somewhat extravagant compliment when speaking of Bao: "What he wants from investing isn't just money — he wants to change the world."

But reality proved somewhat rougher. As the investment industry, and dollar funds in particular, lost momentum, China Renaissance's recent business progress has been difficult to call smooth. Financial reports show that in 2019, China Renaissance's revenue was 1.204 billion yuan, down 7.31% year-over-year. In 2021, total revenue and net investment income was 2.504 billion yuan, down 8.3% from 2.7 billion the previous year, though China Renaissance Securities contributed 409 million yuan, up 61.1% year-over-year.

In comparative terms, China Renaissance Securities' 2021 performance was unremarkable domestically: ranked 97th in revenue, 92nd in net profit; 30th in equity investment income, 59th in investment consulting, 77th in securities investment, and 78th in investment banking.

China Renaissance's most recent financial report is its 2022 interim statement, which notes the immense challenges of the past half-year: Hong Kong new economy IPOs totaled less than 1.4 billion, down 93% year-over-year; the China Internet Index fell another 20% in the first half of 2022 after dropping 70% from its 2021 peak; private financing amounts halved quarter-over-quarter. All of this placed enormous pressure on China Renaissance's private financing, Hong Kong and US IPO business, and asset holdings valuations. The firm's asset management business stood at 48.6 billion yuan in AUM at period end.

Investment banking is a hierarchical industry that is difficult to iterate quickly, because it requires long-term relationship networks and brand building. The landscape dominated by Goldman Sachs, Morgan Stanley, JP Morgan and others has not fundamentally changed in years. And CICC, with its unique growth era and resource endowment, is an unreplicable singular specimen. In this sense, as a private investment bank, Bao's pursuit of a "world-class bank" carried a certain romantic, heroic-expedition quality.

At the end of that 2020 interview, we asked Bao one last question: How far was China Renaissance from its goal of becoming "a world-class financial institution for the Chinese people"?

Bao answered: The Long March has only just begun.

No one would want to see this story end here.

Image source | Visual China

Layout | Meng Du