Latticework Investor

Value Investing

Lei Zhang, from Hillhouse Capital Management, runs largest hedge fund in China

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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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Written by latticework01

May 6, 2010 at 9:57 am

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