"Old soldiers never fade"! Private equity heavyweights are returning to the forefront

Some of the most "explosive" names in China's private equity industry over the past decade are returning to the forefront of performance.

This is the situation shown in the 2024 private equity performance rankings.

For example, Deng Xiaofeng, once considered the "top equity player in private equity," has seen consecutive net asset value increases of over 10% in the past two months, redefining industry perceptions of him.

At the same time, another private equity big shot who had been quiet for a while after personal setbacks, Liang Wentao, has returned to the forefront. Liang shocked the industry this spring by shedding the title of "Li Bei's ex-husband" and delivering a product with tenfold returns over five years.

The veterans who emerged from the "old friends pile" during the era of public fund giants are ultimately the ones best able to adjust their investment strategies.

Deng Xiaofeng's Net Asset Value "On the Rise"

According to Private Equity Ranking Network, as of March 29, 2024, Deng Xiaofeng's flagship product has achieved a year-to-date return of over 10 percentage points, with significant net asset value increases in the past two months.

As a fund manager overseeing billions of assets, achieving such growth in an increasingly competitive era is truly remarkable.

Deng Xiaofeng has once again become one of the earliest among many fund managers with assets exceeding hundreds of billions to regain their touch.

Focus Still on the "Domestic Market"

In the past two years, there have been few fund managers who have been able to escape the "gravitational pull" of A-shares, mostly focusing on high-frequency quant trading or overseas investments.

However, Deng Xiaofeng remains steadfast in the "domestic market." Information from sources indicates that his main holdings are still in A-shares and Hong Kong stocks, with the former accounting for the majority.

Given Deng Xiaofeng's current information processing capabilities and team, it is impossible for him not to be aware of the significant changes overseas.

But instead of following the trend of "overseas opportunities," he has chosen to firmly establish his position in the regions and industries where he excels.

This is still very much in line with Deng Xiaofeng's "value" style, or rather, very "Deng Xiaofeng."

Profits of Over 10 Billion from a Single Stock?

With the surge in non-ferrous metal prices, Deng Xiaofeng's representative stock, Zijin Mining, is expected to have accumulated profits exceeding 10 billion yuan.

Since the third quarter of 2019, Deng Xiaofeng has steadfastly held this stock, with the latest holdings exceeding 700 million shares, corresponding to a market value of at least around 13 billion yuan.

Public information from the listed company shows that Deng Xiaofeng's private equity products first made large-scale purchases of Zijin Mining in the third quarter of 2019.

In that period, the two private equity products under Deng Xiaofeng's management collectively added over 300 million shares, with an average cost of around 3 yuan (pre-adjusted price).

By the end of 2019, Deng Xiaofeng held over 530 million shares of Zijin Mining, with the value of the holdings increasing by nearly 700 million shares in the following quarter, maintaining this ownership ratio since then With the several rounds of rise in Zijin Mining, the current market value of the stock holdings managed by Deng Xiaofeng is over 13 billion, with expected profits exceeding 10 billion.

Liang Wentao Achieves a "Comeback"

If Deng Xiaofeng has been on a major performance uphill in the past few years, then Liang Wentao has almost crawled out of the mud of public opinion and delivered a very surprising performance.

According to the news from Private Equity Ranking Network, a product in Honghu has a yield of over 30% this year. The cumulative return of this product has exceeded 500%.

It is difficult for outsiders to know the ranking of this product in the entire product lineup of Honghu, and it is also difficult to evaluate the overall performance of the institution. But undoubtedly, Liang Wentao has emerged from the previous "struggle".

Former "Veteran"

In terms of qualifications and years of experience, Liang Wentao may be no less than any investment manager who has transitioned from public to private.

He was born in 1972, obtained a Bachelor's degree in Biophysics from Nankai University in 1994, a Master's degree in Management from Peking University in 1999, and a Ph.D. in Management from Tsinghua University in 2003. One person obtained degrees from three top universities in China.

After obtaining his Ph.D., Liang Wentao joined E Fund Management Co., Ltd., becoming its second-generation star fund manager and was promoted to the position of research head at an early stage.

From 2005 to 2007, the two funds managed by Liang Wentao both achieved profits exceeding 110%, after which he entered the private equity sector.

Experiencing a "Low Period"

Like all investment managers have experienced, Liang Wentao's experience in private equity was quite "tortuous".

Liang Wentao's initial performance in private equity was quite impressive, but soon his strategies faced a test. Around the first half of 2016 to 2017, Honghu Investment's products experienced significant drawdowns, leading to speculation from the public.

At the same time, his marriage with another private equity star (who was a partner at the time), Li Bei, also encountered problems. In 2017, Li Bei publicly announced the end of their relationship through an open letter, revealing disputes between them in terms of investments.

However, looking back, it was possibly the lowest point in Liang Wentao's performance. At the latest after 2019, the products managed by Liang Wentao began to soar, and the past two years, which were a challenging phase for the A-share market, turned out to be the time when Honghu, which diligently studied macro strategies, saw its performance take off

The Observation Perspective of Cycles

The performance of Deng Xiaofeng and Liang Wentao may indicate that, after going through nearly 3 years of "hard times", experienced active private equity managers are finding a new state and comfort zone.

Of course, whether this judgment can be confirmed, especially needs to be verified by performance after market tests.

Looking at it from another perspective, the performance of investment managers with specific styles is always difficult to maintain performance every year. Often, when the market is most worried, it may be the moment when a new cycle begins, and when the market is crazily chasing, it may be the time for a new cycle to decline.

There is nothing new under the sun