Junte Liy (MS International Business)
Entering the Emerging Market of Convertible Bonds

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Subject area:                 Investment strategy and financial services

Region:                             China

Industry:                          Financial Services

Company:                        Beijing Lingrui

Client:                                Investment team

Dilemma:                        Whether should the company follow a natural business cycle and cut down investments to avoid the risk of losing their value, or it should try to enter the emerging market of convertible bonds.

 

Investing in Personal Capital                                 

Being a graduate from BS in Mathematics with specialization investment research and analysis in the secondary market and MS in International Business, Junte defined for area of interest as business analytics for the investment industry. Junte selected a Beijing Lingrui, a state-owned investment management company for her project.

 

Investment in Social Capital:                     

Junte conducted thorough company, industry and market research for the convertible bond market in China. She organized a series of interviews with professionals in the field, and became well-informed with the company’s challenges and contexts. As an example, she found because the performance of 2018 stock market was the worst in a decade, the investors lost their confidence in the stock market (secondary market), which results in a shrinking of the company’s fund size.

 

Investment in Professional Capital:                       

In the effort to generate value, Junte conducted case analysis to find matches between the strength of the investment team with the opportunities in the bond market (good policy, gov. support, low risk and growing fast), as well as she compared the weakness of the early stage boutique company (small capital pool) with the potential market threats (the uncertainty risk).

It let Junte ideate her view on how the problem could be solved and recommend a set of strategies for the entry of the bond market, together with an action plan that the company could follow to expand our fund size (“market share”).

 

Capital Utilization:              

By the end of Oct., Junte and her team have completed the early steps:

– created new products and restructured some old products

– held few investment seminars with professionals in the industry to share ideas about convertible bonds

– created and constantly maintain a healthy “investor ecosystem” for our company (to raise more capital)

 

Junte shared:

“This was not a typical consulting project, but the framework and business ideas I use were the same as what I learned in my final project. These frameworks, the importance of crystallizing my focus, understanding clients, and the ability of design thinking were the cornerstones that were useful for any industry and for any business. What’s more important was to use it flexibly and innovatively.”