Established private equity firms regain their "feel" in 2024, veterans take the lead again, and the "middle generation" trends towards differentiation

As 2024 approaches its end, the year-end performance of private equity institutions is gradually coming to light.

Contrary to expectations at the beginning of the year, the quantitative strategies that had been thriving for two years have entered a consolidation phase, with only a few leading institutions achieving good results against the trend.

Another surprise is that a group of established private equity institutions founded before 2010, such as Dongfang Gangwan and Danshuiquan, have shown signs of recovery and achieved good performance.

Perhaps at this moment of accelerated change in a century-old situation, seasoned investors who have experienced multiple cycles are more adept at leveraging their own experiences and endowments to find ways to seek benefits and avoid harm.

Currently, those who can embody the sentiment of "Do not listen to the sounds of the forest and leaves; why not hum and stroll slowly" are likely to be experienced individuals who understand trade-offs.

Dan Bin "Leads Again"

Among the group of private equity fund managers managing billions, Dan Bin continues to show strength in 2024, once again leading the pack.

Statistics from third-party platforms indicate that the registered products under Dan Bin's management are once again prominently positioned among the billion-dollar group in the net value table as of December 2024.

As a fund manager of a private equity established in March 2004, Dan Bin has experienced over 20 years of cycles in the mainland stock market, having had moments of extraordinary optimism as well as being caught off guard during the significant drop in 2008, followed by a "separation" within his team.

In the past two years, Dan Bin's main positions have been concentrated in U.S. stocks, particularly favoring AI concept stocks, thus benefiting from the strong performance of these overseas stocks.

This seasoned fund manager, nearing his sixtieth year, still maintains a "youthful spirit" in the latter half of his career, daring to concentrate most of his assets on one or two points for layout, a courage and optimism that indeed surpasses his peers.

From this perspective, Dan Bin's renewed leadership in 2024 is a result of his personal choices and the inherent rules of his distinctive style.

Of course, such a style is also a double-edged sword; how Dan Bin will adjust next and the direction of future performance will be points of interest for next year.

Danshuiquan "Returns to Spring"

Founded in 2007, Danshuiquan Investment is another established institution that has shown signs of recovery this year.

Data from distribution channels indicate that Danshuiquan's related products have achieved nearly 20 percentage points in returns this year, sweeping away the adjustment trend of the past two years.

It is worth noting that public equity institutions with similar strategies currently have average returns of around 5% to 6% for their equity products, while Danshuiquan's performance in 2024 has clearly surpassed its peers.

Danshuiquan is one of the representative institutions of subjective equity style private equity in the mainland, and it manages A-share accounts for several overseas sovereign funds, making its overall team strength formidable.

However, due to its strategy leaning towards contrarian and reversal characteristics, it faced certain net value pressures in the two to three years leading up to 2024.

Currently, it appears that Danshuiquan's performance in 2024 shows clear signs of recovery. Industry insiders have reported that Danshuiquan's vigorous promotion of research organization upgrades and iterations in recent years should be beneficial to its investment research capabilities. On the other hand, the strategy style they have adhered to may also be welcoming a return of market style after several years of adjustment.

"Middle Generation" is Striving

The "middle generation" private equity established after 2010 is more evidently in a state of differentiation Relatively speaking, Zhuang Tao of Panjing Investment and Sun Jiandong of Hongdao Investment have performed more prominently.

Zhuang Tao has considerable experience in the A-share market, having previously worked at Huashang Fund, the proprietary trading department of Changjiang Securities, and China Aerospace Science and Industry Corporation, before founding a private equity firm. His investment journey has always been "bound" to leading stocks in the consumer sector.

However, the consumer sector has been sluggish for the past three years, and the other growth assets he has explored are also facing headwinds, putting pressure on his fund management.

Nevertheless, in 2024, his products accumulated a return of 12%, and the losses over the past three years have narrowed to less than 30 percentage points.

Hongdao Investment, a private equity firm established in 2010, achieved over 25 percentage points in returns in 2024, which also reduced their cumulative losses over three years to less than 50 points.

Before founding Hongdao, Sun Jiandong worked at China Galaxy Securities Asset Management Headquarters, Huaxin Securities, Harvest Fund, and Huaxia Fund. In the 2000s, he managed a single product for Huaxia with a scale close to 30 billion yuan, becoming one of the representative "old Huaxia" star fund managers.

It is worth noting that Hongdao Investment's performance over the past three years has been at the tail end of the industry, and this year's ability to capture returns somewhat reflects a reversal characteristic. Whether this can be sustained is worth paying attention to.

Still in the "Struggling Zone"

According to relevant data from channels, some mid-generation private equity firms have faced significant performance pressure over the past three years, but in 2024, they have just crossed the "absolute return" threshold.

Shifeng Asset is one such example. This firm was a champion in the private equity circle during the last round of index bull market, advancing into the hundred billion private equity space by heavily investing in consumer stocks and attracting a large number of investors to "increase their bets."

However, after the "group stock" rally ended at the end of the first quarter of 2021, Shifeng Asset's performance experienced considerable fluctuations, with some products losing over 40 percentage points in the past three years.

Latest data shows that the products of this former champion have annual returns between 3.6% and 6.0%, emerging from the performance gloom of the past three years, but the return level is still near the absolute return line, and it will take time to escape the struggling zone.

Zeng Xiaojie of Yuanlesheng Asset also recorded "absolute returns" in 2024, with the latest data showing an annual return of around 7%, while cumulative losses over the past three years are close to 40 percentage points.

It is reported that Zeng Xiaojie places great importance on growth stocks, especially the explosive opportunities in the artificial intelligence industry, but betting on individual stocks that "can rise" and contribute to the overall portfolio net value requires more technical "portfolio arrangement."

Zhang Xiuqi of Qushi Asset, which was once very popular a few years ago, has also faced -38% pressure on product returns over the past three years. This private equity firm represents the state of many "explosive" private equity firms from the last bull market, having once been brilliant but then falling into a performance trough.

However, Qushi Asset has earned a return of 9 percentage points this year, which is relatively good among mid-generation firms