Lei Zhang, from Hillhouse Capital Management, runs largest hedge fund in China
Notes from the Value Investing Congress Twitter feed.
Lei Zhang, from Hillhouse Capital Management, runs largest hedge fund in China
- $4 billion AUM, started with $30 million
- 52% annualized returns since inception (8/2005) through 3/2010
- Zhang runs concentrated portfolio, fundamental bottom up research
- Uses team based research process
- 3 to 5 year avg holding period on long positions
- Zhang focuses on people and organization behind the business
- Currently 50% cash, adds 3 to 5 names/year
- Zhang currently negative on shipping
- Zhang-common investment mistakes in China: short term orientation, over excitement about short term growth, concentrated bets
- Zhang generally does not like small caps
- Zhang discussing Changyu Corp, Chinese wine company, with massive distribution
- 2008 ROE 35%
- Zhang owns B shares
- No license needed in China to sell liquor, little regulation
- Zhang now taking questions
- Zhang’s favorite shorts are the “frauds”
- Consumer debt just 16% of Chinese GDP, savings rate high, net savings of $35 trillion Yuan
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