Successful bets tencent jingdong, zhang by research force make the billionaire investor

note: hunting cloud hillhouse capital founder zhang, who seldom appear in the media, is mysterious and low-key, but its belief in the value of the long-term structural investment idea makes its returns, since its creation in 2005, hillhouse capital of average annual rate of return as high as 39%, what’s the special book of secret of his success? Here are from Chinese website of the New York times reported:

he is one of the richest investors in China, with $18 billion in funding for disposal. However, in a recent trip to San Francisco, zhang lei and accompanying is in church District (Mission District) a three-bedroom house, we rent house is in reality.

he also ordered from grocery delivery service provider Instacart water. A few days later, he was in New York, via Google Express to buy the food.

of course, it’s not because he cannot afford luxury hotels and restaurants, but in doing research. Zhang just want to know they may one day investment business.

10 years ago, from Yale university endowment funds of $20 million, zhang became early investors of the companies such as tencent and jingdong. These companies have already made some of China’s traditional industry has changed dramatically, now, zhang lei believe they can bring great impact on a global scale.

“China could become one of the engines of global innovation revolution.” Zhang lei in the company’s Hong Kong office hillhouse capital group, said in an interview. The office is located in one of the city’s tallest skyscraper, the Victoria harbour scenery panoramic view.

in the silicon valley in the ocean, zhang represents China’s emerging entrepreneurial class. He had to Mark Zuckerberg (Mark Zuckerberg) and Jeff Bezos (Jeff Bezos) such people ask questions, also visited an start-up companies, etc.

to outsiders, hillhouse is a mysterious company, by one happened to have struck gold in the early stages of a mysterious man at the helm. And in the eyes of zhang investors – including like the Massachusetts institute of technology (MIT) and Yale university (Yale) such a famous university endowment funds, as well as sovereign wealth funds, and wealthy entrepreneurs – he seems to never down bad bets. But as China’s economy is a series of problems, he may be the next wave of investment for a final verdict on his career.

the company to the investors or the investment record mentioned, only emphasizes the company adhere to the long-term investment. One investor said, hillhouse since its creation in 2005, the average annual return of 39%.

with a bulging wallet, zhang lei and hillhouse find more opportunities in the United States.

in recent trading, hillhouse teamed up with Mayo Clinic (Mayo’s a-clinic), one of the well-known medical institutions to China. Zhang hopes to use modern technology, creating digital archives management system so that new services and products, to overthrow the operation impeded, the need to reverse the health care system.

but challenge is waiting for zhang. China’s health care industry rampant corruption; Western companies such as GlaxoSmithKline (GlaxoSmithKline) already in the net of bribery investigation. Public hospital was dragged down by the bureaucratic mechanism. An ageing population surge in demand for services is.

zhang lei said that he has the ability to complete the task.

his breakthrough occurred in Yale university endowments to recruit him as intern. This is not a regular arrangement, they usually don’t accept the MBA students as interns, but zhang, chief investment officer David f. svensson (David f. Swensen) leave deep impression.

“almost immediately, can see, zhang lei is very good, have very great insight,” Yale university endowment funds, senior director of Dean Takahashi (Dean Takahashi) said. he said zhang can see which companies can become very well. And zhang is good at networking, he in the campus of Yale university founded hillhouse club, and through it introduces successful Chinese entrepreneurs. the name of this club from Hillhouse Avenue (Hillhouse Avenue), some of his course is on there.

“we are very curious, why did the young man would have these insights from China?” Takahashi said.

as an intern for the endowment, zhang was sent to areas such as timber industry to do research, after a few weeks back, he will hand over 1 inch thick. This tradition has continued in his company. With the Mayo clinic in hillhouse before a deal, analysts spent several years were studied.

after spending the first year at Yale, Zhang Leihua some time to study China’s expanding the private sector, and knocked on the door home based business, such as jack ma of alibaba, robin li of baidu and tencent ma, zhang lei, we have established friendship with them. After the dotcom bubble burst in 2001, he returned to the United States.

four years later, an MBA degree he convinced Yale university to give him $20 million, investment in the new company of China. When he to promote the idea that people hesitate. At that time, he was very young, a former colleague of Yale university endowment funds, recalls that all don’t know who to hire. Zhang called the old friends. A friend rejected his offer of work, but recommended his wife.

“I said, ‘are you serious? You ignore me, threw his wife to come over? ‘” zhang recalls. Friend’s wife Ma Cuifang (Tracy Ma) now is hillhouse chief operating officer, and the second number.

zhang is one of the earliest pressure bet tencent; He bought shares in the company in 2005, was one of the most famous product of tencent QQ communication tools, the value of the company less than $2 billion. Today, tencent has become the Internet giant, is worth more than $160 billion.

“in retrospect, I think, wow, tencent was so cheap,” zhang said. Hillhouse still tencent holdings.

other investment has received generous returns. In 2010, hillhouse XiangJing east investment of $255 million. Four years later, jingdong initial public offerings, the value of the stake has raised $3.9 billion. In 2014, tencent company for $215 million to buy jingdong, when 15% of its shares Zhang Leiceng behind the scenes to participate in the deal, according to two people familiar with the right to speak publicly.

hillhouse buy and hold shares of strategy, make it more like a private equity firm, rather than hedge funds. The investors willing to long-term investment.

this gives zhang space, let he can more easily investment to private companies, such as China’s consumer goods producers blue moon. In 2006, when zhang founded the first time I saw blue moon of husband and wife two people, they are selling hand sanitizer. He stayed in touch with two people. A few years later, they called to tell him, they developed a new kind of liquid detergent.

a thought then in zhang’s mind. This was in 2010, most of the multinational company sales of powdered detergent in China, they don’t think consumers will spend more money to buy liquid detergent. But zhang doesn’t think so, he persuaded blue moon vigorously expand laundry detergent market, and to provide funds for its expansion, in exchange for shares in the company.

now, zhang has bet, think a trip can be a billions of dollars’ worth of brand, brand compete with the tide. Hillhouse in companies such as gree, midea and similar investment, the former is the world’s leading maker of air conditioners and the latter is a home appliance manufacturers.

“I saw the rise of Chinese entrepreneurs, they can improve themselves, and the action is relatively slow, multinational companies,” zhang said, Chinese companies have learned to go beyond the traditional industry, the company can learn something from them.

this is a kind of familiar with his grassroots skills – not only because he was born, just a few years will become a billionaire, but he also enthusiastic type to stimulate movement. In February, skiing in Colorado, liu ryder when he slipped from the steep slopes of a straight line.

he said that investment in China “is not suitable for people of weak will, however, he also said,” if you open mind, and focus on China’s future “, so it is also a huge opportunity.