New orbit for fund star

Stellar manager Wang Yawei is striking out on his own after years of generating heat and rewards as part of China Asset Management

PUBLISHED : Monday, 04 February, 2013, 12:00am
UPDATED : Monday, 04 February, 2013, 3:57am

Wang Yawei is that rare quantity in the mainland markets: a star fund manager.

The name of the former vice-president and investment chief of China Asset Management (CAM), the mainland's largest mutual fund house, is spoken in the same breath as that of Warren Buffett, "the Sage of Omaha".

Given Wang's track record in the roller-coaster equity market, thousands of retail investors would waste no time in snapping up a company's shares if his funds were rumoured to have increased their holdings in the firm.

The mutual funds he managed were perennially among the best-performing funds on the mainland. Investors believe he shares Buffett's gift of being able to sniff out the best investment opportunities at the right time.

The news he would quit the mutual fund industry to set up his own shop in the hedge fund sector grabbed headlines in May last year. Although he has a cult following, Wang never talks to the media and keeps a low profile.

Yet, the major financial websites are rife with speculation about the movements of Wang's funds, with investors trying to figure out how to follow in his trading footsteps.

Born in 1971, Wang majored in electronics at Tsinghua University after topping the college entrance exam for Anhui province in 1989.

After graduating, he went into the then fledgling securities industry as a researcher at a Beijing outlet of China Securities.

Three years later, he joined the newly established CAM and was soon appointed an assistant fund manager of its first mutual fund. He later became a fund manager.

Between 1998 and 2002, Wang's fund reported a gain of more than 80 per cent, more than four times the increase in the benchmark Shanghai Composite Index during the same period.

Even the five-year bear market from 2002, plagued by a crisis of confidence in fund managers' ethics and the reliability of listed firms' earnings reports, didn't stop Wang from outshining his counterparts. In 2004, when the benchmark lost 15.4 per cent, his fund gained about 4 per cent.

Buoyed by the performances of Wang's funds, CAM grew by leaps and bounds into the mainland's largest mutual fund firm.

"I always focus on the opportunities available rather than theoretical discussions," Wang said in May. "We need to respect the opportunities offered at different periods of time in history."

Wang seemed to suggest that investment strategies had to be revised all the time.

When he went into the asset management business in the 1990s, the mainland's stock market was driven by speculation, as investors traded on rumours rather than valuations.

Mutual funds, with assets of billions of yuan each, were described as zhuang - powerful institutions that had the clout to control stock prices.

It was not until 2003 when Beijing introduced the qualified foreign institutional investor (QFII) scheme that investors began to look at economic and corporate fundamentals before making investment decisions.

The select QFIIs helped set a healthy tone for the market.

From 2006, a clutch of experienced fund managers jumped ship to so-called sunshine private trust funds - a prototype form of hedge fund - attracted by higher pay and perks, but Wang chose to stay at CAM.

Securities analysts said the mutual fund sector, with Wang as a "bastion", could still eclipse hedge funds, since investors would still place their trust in star fund managers like him.

Admitting he was working under stress, Wang said in May that he had been considering a change for a long time.

"As time went by, the feeling increased," he said.

In July, Wang set up a business in Hong Kong called Top Ace Asset Management.

In October, he registered a firm in Qianhai, a special development zone in Shenzhen that Beijing hopes to use as a testing ground for further liberalisation of the finance sector.

"My investment style is market-oriented," Wang said.

"In terms of investments, I don't think the job change makes a difference."

All eyes will be on the results of his new investments, but analysts say it will be difficult for Wang to post gains similar to those of the funds he managed at CAM, because there he was supported by a team of high-calibre researchers. According to the Hainan Special Zone News, the hedge fund launched by Wang in Shenzhen posted a gain of less than 4 per cent in December, lagging the 7.37 per cent increase in the benchmark indicator during the same period.

"I feel safe when I hide in a crowd," Wang said. "I want to have my own way of thinking. I will respect the market."