News that Warren Buffett is planning to hire Li Lu, a hedge fund manager and student leader during the Tiananmen Square protests in 1989, is rich in symbolism. The world's most famous investor, now 79, has been looking for a small elite group of executives who will take over Berkshire Hathaway, his flagship company, when he retires.
By hiring Li, it would mean Buffett recognises the seismic shift in the centre of financial gravity from West to East, and that accelerated growth is likely to be found in China and other emerging markets. Li, who received his doctorate in the United States and has run a hedge fund that handily beat the S&P 500 benchmark for more than a decade, has proved his financial acumen. He specialises in hi-tech companies in developing countries, two areas in which Buffett has never been comfortable investing. In particular, Li helped Buffett buy a major stake in the mainland car and battery maker BYD, an investment that has grown eightfold.
According to Buffett's lifelong investment partner Charlie Munger, hiring Li is 'a foregone conclusion'. If so, it would be interesting to see how Li manages investment in his original home country. Li has, understandably, kept mum about the reported hiring. And he has stayed clear of politics in recent years, so it's unclear what he thinks about developments in China since he fled the country as a wanted dissident. And what does Beijing think of him, when he will have potentially many billions to invest in the country? It is not known whether he has ever been officially taken off Beijing's wanted list.
One can already imagine this picture perfect scene: on the tarmac of a Beijing airport, Li arrives in his personal jet while a red carpet is rolled out for him. He is then slowly driven past Tiananmen Square, to a dinner with state leaders. Maybe the late paramount leader Deng Xiaoping was right; getting rich is glorious. Perhaps it will be in the world of high finance that Beijing and Li can finally effect reconciliation over that bloody crackdown that has scattered families and scarred so many lives. That would not be perfect justice, but it is the way of the world.
