Sunday, June 29, 2008

In Profile: Zhao Danyang

So who is Zhao Danyang, the man who paid $2.1 million to have lunch with Warren Buffett?

Mr. Zhao manages Pure Heart Asset Management, based in Hong Kong. He says he invests based on "logic and reviews of financial statements", but he told Euromoney that "...he has [also] sneaked into factories to talk directly to workers of a manufacturer, checked sell-by dates on bottles of pills to ascertain stock turn levels for a Chinese medicine company and even resorted to counting cars on the highways of a toll road operator."

The former consumer electronics factory owner is dong well as a fund manager. According to data supplied to us by Pure Heart Management.

In 2003, Pure Heart China Growth Investment Fund showed a return of 46.51% (versus 29.7% for the Hang Seng Index). In 2004, a return of 23.86% (versus 13.5% for the Hang Seng Index). In 2005, a return of 31.64% (versus 4.5% for the Hang Seng ndex). In 2006, a return of 141.75% (versus 34.2% for the Hang Seng index). In 2007 a return of 10.70% (versus 37.02% for the Hang Seng Index) and for the first 5 months of 2008, a decline of 9.70% (versus a declne of 7.4% in the Hang Seng Index).

Mr. Zhao claims to use "the spirit of the professional paparazzi" to probe deep into the companies he examines. He is dedicated to fundamental research and holds long term, with turnover that is below average for an institutional investor.

Pure Heart's web site states:

We may find ourselves standing at the starting point of a new era in the Chinese capital market when looking forward 30 years from now on this historical chapter. Pure Heart China Growth Investment fund will accompany you to reap the rewards from these changes.

Mr. Zhao graduated from Xiamen Universty in 1994. He received a Bachelors Degree in Systems Engineering. He began his career in the securities business in 1996.

He was invited by Guotai Junan (HK) Securites Ltd in 2002 to oversee the fund management of Pure Heart China Growth Investment Fund. Mr. Zhao is currently the General Manager of Pure Heart Asset Management Ltd., Pure Heart China Growth Investment Fund. He is also acting in the post of Chief Investment Officer of "ICBC Custody Trust", "Ping An I Unit Trust", "Ping An II Unit Trust", and "SZITIC Investment Trust" .

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