China hedge fund founder buys US$39 million Shanghai villa at discount in online Taobao auction
- Winning bid was about 10 per cent below the appraised value of the 14,000 sq ft villa
- Local newspaper earlier identified Qiu Huiming of Shanghai Minhong Investment Management as the buyer
The founder of a top quantitative hedge fund in China bought a villa in Shanghai for 285.5 million yuan (US$39 million) in an online auction, scooping up one of the city’s most expensive homes for less than its appraised value.
The winning bid was about 10 per cent lower than the 316.4 million yuan appraised value for the 1,300-square metre (14,000-square foot) property in the Pudong district, according to records on Taobao. The villa was sold on Alibaba Group’s auction site after its previous owner failed to repay more than 67 million yuan owed to a bank.
Shanghai Minghong Investment Management founder Qiu Huiming was the buyer, according to a person familiar with the matter, declining to be identified discussing private information. The firm declined to comment. Local newspaper China Securities Journal reported the identity of the buyer earlier.
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Qiu previously worked for Millennium Management and HAP Capital Advisors in the US, before returning in 2014 to start Shanghai Minghong. The firm is now one of the biggest quant funds in China, managing more than 60 billion yuan.
China’s quant funds have expanded rapidly in recent years as inefficiencies in retail investor-dominated markets provided fertile ground for algorithm-driven trading. The industry, managing about 1.6 trillion yuan of assets, is regaining popularity relative to discretionary traders amid volatile markets, even after its expansion drew regulatory scrutiny and eroded returns in 2021.
Shanghai Minghong ranked ninth among equity hedge funds managing more than 10 billion yuan in the first seven months of the year, with an 8.4 per cent gain, according to Shenzhen PaiPaiWang Investment & Management. By contrast, China’s benchmark CSI 300 index returned less than 4 per cent in the same period.
China’s housing market has been in free-fall for two years, with sales and prices plunging on weak consumer demand and a wave of debt defaults by some of the biggest developers.