His fund boasts enough capital to bully a tiny nation and his returns have been great enough to rival those of Druckenmiller, Simons, and Dalio. But still, Hillhouse Capital’s Zhang Lei appears to be little known outside of Yale and maybe a few pockets of the fund management space.
Perhaps it’s his fund’s penchant for secrecy, or maybe Zhang’s deliberate avoidance of the limelight, but in any case, here are five things you may not know about Hillhouse Capital chairman and CIO, Zhang Lei:
He started his career at the Yale Endowment
While a large chunk of fund managers began their careers in bulge bracket banks, Zhang started his on the buyside, and at the august Yale Endowment no less. David Swensen – the fund’s vaunted CIO – apparently saw potential in Zhang and aside from teaching him the ins and outs of investing, had him translate his book into Chinese as well. He created new words for “endowment” and “fiduciary” in the process.
He launched Hillhouse with backing from Swensen
Raising cash for a fund is hard in itself, raising cash from the Yale endowment – that’s even harder. Still though, Swensen helped his mentee launch Hillhouse in 2005 with $20 million from the notoriously-picky group, with $10 million sent shortly after. Today it manages $20 billion.
He has a stellar investment record
From 2005 to 2012, Hillhouse raked in an average 52% annual return, a massive result by any measure, and made doubly impressive by the fact that it sunk 37% in 2008. I know, that completely sounds a like a blowup, but given that his fund invests for the “very long term,” investors may find it easy forgive him. Those returns have since shrunk to above 40% though.
He was one of the earliest backers of Chinese internet companies
What was Hillhouse’s first investment? A huge wager on Tencent. In an interview with the Financial Times, Zhang said that at the time – 2005 – people were still looking at the U.S. for innovative companies, dismissing China’s offerings as mere copycats. But he thought that “China has leapfrogged the US in many ways, especially mobile internet” back then, and the rest, as they say, is history.
He’s on the board of several companies and institutions
Aside from being on the board of 360buy, Qunar, and Indonesia’s Global Mediacom, Zhang also serves as a trustee for the Brookings Institution, a board member of the Financing & Capital Council of the World Economic Forum, the advisory board of the Yale School of Management, and is a member of the President’s International Advisory Council.
Photo: Hillhouse Capital Group
