The top 25: Annabelle Yu Long, Bertelsmann Asia Investments (BAI)
Bertelsmann Asia Investments (BAI) had a “fantastic year,” according to the Germany-based media company’s spokesman, with nearly 30 new investments and four portfolio companies that filled for an initial public offering (IPO).
That this was Bertelsmann’s most active region for corporate venturing and highlighted in its full results speaks eloquently to Annabelle Yu Long, head of BAI’s, performance and skills.
Germany-based Bertelsmann is one of the world’s oldest and largest media, services and education groups with more than 119,000 employees – 2,000 more than the year before – and €17.2bn ($19.1bn) in revenue last year.
In the past year, Bertelsmann, which traces its book publishing back more than 180 years, has bedded down its focus on education as its third main business line alongside media and services, after making corporate venturing through Bertelsmann Investments one of its eight divisions.
Thomas Rabe, CEO of Bertelsmann, for last year’s Powerlist award to Shobhna Mohn, executive vice-president for growth regions strategy and Bertelsmann Investments, said: “The work done by Bertelsmann Investments not only facilitates knowledge transfer and innovation scouting across all our lines of business, but is also financially successful.”
Mohn for a profile on the company published September 2016, said: “Corporate venture activities are of significant strategic relevance for Bertelsmann. All our key investment platforms have therefore been grouped in a separate division, Bertelsmann Investments.
“In particular, our venture fund activities make an important contribution to the development and expansion of our businesses in Brazil, China, India and the US.
“Through our investments, we gain insights into the trends in a given market, identify strategically relevant businesses at an early stage, build partnerships with local investors and entrepreneurs and benefit financially from the successful development of young startups. In return, we bring valuable business building experience and our existing network to our portfolio companies.
“Moreover, the insights gained through our investments are one of the key drivers of the group’s digital transformation.”
Through its four funds within, Bertelsmann Asia Investments (BAI), Bertelsmann Brazil Investments (BBI), Bertelsmann India Investments (BII) and Bertelsmann Digital Media Investments (BDMI), Bertelsmann Investments made more than 40 new and various follow-up investments in young companies. Bertelsmann now has more than 160 shareholdings around the world through its funds. Since 2012, Bertelsmann has invested more than €600m through its four investment funds alone, while its other divisions also expanded their activities, such as Arvato increased its stake in financial services provider Intervalor in Brazil from 41.5% to 81.5% and RTL Group acquired a minority stake in the Israel-based virtual reality company Inception.
And while there might be four growth regions, there is clearly one that is dominant: China. With more than 110 investments over the past decade since Long founded BAI in 2008, the group now manages more than $1.5bn
Long, who also sits on the board of listed companies Tapestry, BitAuto, CDEL and iClick, as well as private companies Meili, Bigo Live, 352air and Jike, has built the team from the ground up.
Long is also CEO of the Bertelsmann China corporate centre and on the company’s group management committee (GMC), which advises the executive board on corporate strategy and development.
Long reports directly to Rabe, chairman and CEO of the executive board, which effectively runs the company through the GMC. She said: “Bertelsmann Asia Investments is one of the best-known and most successful funds in the Chinese investment scene at this point. We continue to put into practice what we set out to do 10 years ago. And we are pleased that, with such a small team, we are able to make a sizeable contribution to a global media corporation like Bertelsmann.
“There is probably no other company at Bertelsmann that generates such a high profit per capita as the six-member BAI team – and we’re proud of that, of course. Every year we have the same expectation and aspiration: to be better than the year before. So far we have always managed that – and I’m very confident that this will continue to be the case, since we invest in growth regions and growth sectors. We are surfing a very positive, sustained trend, so it’s not an unrealistic expectation.”
Bertelsmann Investments’ results are determined mainly on the basis of earnings before interest and taxation (ebit), which at €141m “significantly exceeds the previous year’s figure of €35m,” Bertelsmann said in its latest results.
Its results added: “Capital gains from divestments once again made a positive contribution to group profit in the past financial year. In China, BAI made 29 new investments during the reporting period, and seven follow-on investments, including in the bike-sharing app Mobike and mobile commerce services provider SEE.
“For the first time, four BAI holdings went public in a single year. In 2017, the premium lifestyle platform Secoo, the fintech company Lexin and the digital marketing platform iClick debuted on the Nasdaq [stock exchange], and the online automobile retail transaction platform Yixin Group on the Hong Kong Stock Exchange.”
Secoo raised about $140m in September as the first e-commerce IPO since Alibaba’s in 2014. Online lending platform LexinFintech and iClick Interactive Asia Group raised $108m and $30m, respectively, both in December.
However, the big success was Yixin Group, a China-based e-commerce marketplace operator spun out of automotive transaction services provider BitAuto (and on whose board Long sits), which raised HK$6.77bn ($867m) in its IPO last year.
Yixin issued almost 879 million shares on the Hong Kong Stock Exchange priced at the top of the IPO range, giving it a market cap of about $6.54bn.
But while she has made a success of BAI, the groundwork for Long’s success was laid beforehand. After her MBA from the Stanford Graduate School of Business and a BSEE from the University of Electronic Science and Technology in China, Long joined Bertelsmann in New York in 2005 and worked as a principal at Bertelsmann Digital Media Investments prior to founding BAI.
Before joining Bertelsmann, Long started her career as a TV anchor and became a producer with a variety of highly rated, award-winning television and radio programs in China, the company said.
And her results have been recognised outside of the company. Long was named a Young Global Leader (YGL) by World Economic Forum. She is the first person to join YGL’s Advisory Council from China and also serves as a member of its Global Agenda Council on the Future of Media, Entertainment and Information. Long was named Fortune China’s 25 Most Powerful Women in Business of 2017 and 2016 ChinaVenture – Financial Times China Top Investor.
But inside Bertelsmann remain her strongest supporters. Rabe moved from chief financial officer to chairman and CEO of Bertelsmann at the start of 2012 and instigated a strategy based on growth regions and built around supporting its existing business lines, including through digitisation, and finding new “growth platforms”, such as education, services, content for television and “other sales channels”.
The company said: “These examples show why a significant portion of Bertelsmann’s investment funds will be channelled into such new businesses from now on. Activities in these lines of business will help Bertelsmann to become a faster-growing company in the next five to 10 years.”
Bertelsmann also puts its focus on transformation, down to its private family-owned structure giving it focus and flexibility to make changes, with its top two core values being partnership and entrepreneurship, taken as the principle of decentralisation.
Bertelsmann is controlled by the Mohn family and the Bertelsmann Foundation after it spent €4.5bn in 2006 on buying back shares traded to Groupe Brussels Lambert for control of entertainment company RTL Group.
And the family might feel Long would be welcome to join them given BAI’s success.