Skip to main content
MENU
Subscribe
  • Subscribe
  • Account
  • LOGIN
  • Topics
    • Alternatives
    • Consultants
    • Coronavirus
    • Courts
    • Defined Contribution
    • ESG
    • ETFs
    • Hedge Funds
    • Industry Voices
    • Investing
    • Money Management
    • Opinion
    • Partner Content
    • Pension Funds
    • Private Equity
    • Real Estate
    • Russia-Ukraine War
    • SECURE Act 2.0
    • Special Reports
    • White Papers
  • Rankings & Awards
    • 1,000 Largest Retirement Plans
    • Top-Performing Managers
    • Largest Money Managers
    • DC Money Managers
    • DC Record Keepers
    • Largest Hedge Fund Managers
    • World's Largest Retirement Funds
    • Best Places to Work in Money Management
    • Excellence & Innovation Awards
    • WPS Innovation Awards
    • Eddy Awards
  • ETFs
    • Latest ETF News
    • Fund Screener
    • Education Center
    • Equities
    • Fixed Income
    • Commodities
    • Actively Managed
    • Alternatives
    • ESG Rated
  • ESG
    • Latest ESG News
    • The Institutional Investor’s Guide to ESG Investing
    • ESG Sustainability - Gaining Momentum
    • Climate Change: The Inescapable Opportunity
    • Impact Investing
    • 2022 ESG Investing Conference
    • ESG Rated ETFs
  • Defined Contribution
    • Latest DC News
    • DC Money Manager Rankings
    • DC Record Keeper Rankings
    • Innovations in DC
    • Trends in DC: Focus on Retirement Income
    • 2022 Defined Contribution East Conference
    • 2022 DC Investment Lineup Conference
  • Searches & Hires
    • Latest Searches & Hires News
    • Searches & Hires Database
    • RFPs
  • Performance Data
    • P&I Research Center
    • Earnings Tracker
    • Endowment Returns Tracker
    • Corporate Pension Contribution Tracker
    • Pension Fund Returns Tracker
    • Pension Risk Transfer Database
    • Future of Investments Research Series
    • Charts & Infographics
    • Polls
  • Careers
  • Events
    • View All Conferences
    • View All Webinars
    • 2022 Retirement Income Conference
    • 2022 Managing Pension Risk & Liabilities
    • 2022 WorldPensionSummit
Breadcrumb
  1. Home
  2. ALTERNATIVES
May 11, 2016 01:00 AM

CIC executive slams hedge funds over returns, yuan short bets

Bloomberg
  • Tweet
  • Share
  • Share
  • Email
  • More
    Reprints Print

    China Investment Corp.'s Roslyn Zhang, a managing director at the nation's sovereign wealth fund, criticized hedge fund managers for everything from herding into bets against the yuan to lacking skills to make money.

    “Over the last couple years, I'm kind of disappointed by the performance,” Ms. Zhang said Wednesday at the SkyBridge Alternatives Conference in Las Vegas. Ms. Zhang, who oversees fixed-income and absolute-return investments, said the Beijing-based CIC is a “sizable” investor in the industry.

    Ms. Zhang said Chinese retail investors have been faulted for crowding into markets and driving up prices, but hedge fund managers are equally to blame for their “herd mentality.” She particularly criticized widespread betting against the Chinese yuan, a wager made by many hedge fund managers with which the sovereign wealth fund invests.

    “All kinds of strategies, they run different strategies, they all have the same trade,” Ms. Zhang said. "They really don't know much about China, but they just spend two seconds and put on the trade. Should we pay 2 and 20 for treatment like this?" she said, referring to the industry's fees.

    Hedge fund managers are among the highest paid in the finance industry, traditionally charging 2% of assets as a management fee and 20% of profits. Their fees have been criticized by investors including billionaire Warren Buffett.

    Ms. Zhang also made the case that China's economy continues to be strong, despite the recent wave of hedge fund managers betting on a hard landing. She said China's leverage and military infrastructure are tiny compared with those in the U.S. Heavy building is necessary to support the country's massive population, and China could absorb even more construction, she said.

    “If you're worried about China, you should be twice as worried about here,” she said.

    The International Monetary Fund projects a 6% expansion on average over the coming five years, below a target set by China's communist leadership.

    Ms. Zhang's comments sparked a heated exchange between panelists Don Brownstein, founder of Structured Portfolio Management, and Milton Berg, founder of MB Advisors.

    “I would rather put my money with a communist government than a capitalist government,” Mr. Brownstein said, without elaborating.

    Mr. Berg said investors need look no further for evidence of China's weakness than its stock market, which has dropped about 20% this year, while the S&P 500 index has gained about 2%.

    Ms. Zhang said money managers need a new skill set to make money in today's markets.

    “Only less than 10% of managers are actually capable of adapting to the new reality,” she said, without providing details. “Probably 90% of the managers think they are part of the 10% anyway.”

    CIC's assets were more than $740 billion as of the end of 2014, according to the company's latest annual report.

    Related Articles
    New York City Employees to liquidate hedge fund portfolio
    Public pension funds feeling the heat in hedge fund furor
    Investors not following New York City's lead
    Hedge fund challenges
    China's CIC reports first annual loss on its overseas investments since 2011
    China Investment Corp. eyes Asian hedge funds to boost returns
    Texas pension fund taking bold step on fees
    China fund-of-funds industry beginning to blossom
    Recommended for You
    McNeely_Doug_i.jpg
    Carlyle hires BlackRock's McNeely to work with big clients
    goldman_logo_1550-main_i.jpg
    GSAM invests in direct lending firm Varagon Capital Partners
    Michael Harris
    Quest Partners hires new president
    New SEC Rule on Fair Pricing Determination Needs Careful Consideration
    Sponsored Content: New SEC Rule on Fair Pricing Determination Needs Careful Consideration

    Reader Poll

    July 6, 2022
    SEE MORE POLLS >
    Sponsored
    White Papers
    Nearing the finish line: Ideas on end-state investing for corporate DB plans
    The Meaning of "Portfolio Intelligence"
    Credit Indices: Closing the Fixed Income Evolutionary Gap
    Forever in Style: Benchmarking with the Morningstar® Broad Style Indexes℠
    Crossroads: Politics, Inflation, & Bonds
    Is there a mid-cap gap in your DC plan?
    View More
    Sponsored Content
    Partner Content
    The Industrialization of ESG Investment
    For institutional investors, ETFs can make meeting liquidity needs easier
    Gold: the most effective commodity investment
    2021 Investment Outlook | Investing Beyond the Pandemic: A Reset for Portfolios
    Ten ways retirement plan professionals add value to plan sponsors
    Gold: an efficient hedge
    View More
    E-MAIL NEWSLETTERS

    Sign up and get the best of News delivered straight to your email inbox, free of charge. Choose your news – we will deliver.

    Subscribe Today
    July 4, 2022 page one

    Get access to the news, research and analysis of events affecting the retirement and institutional money management businesses from a worldwide network of reporters and editors.

    Subscribe
    Connect With Us
    • RSS
    • Twitter
    • Facebook
    • LinkedIn

    Our Mission

    To consistently deliver news, research and analysis to the executives who manage the flow of funds in the institutional investment market.

    About Us

    Main Office
    685 Third Avenue
    Tenth Floor
    New York, NY 10017-4036

    Chicago Office
    130 E. Randolph St.
    Suite 3200
    Chicago, IL 60601

    Contact Us

    Careers at Crain

    About Pensions & Investments

     

    Advertising
    • Media Kit
    • P&I Content Solutions
    • P&I Careers | Post a Job
    • Reprints & Permissions
    Resources
    • Subscribe
    • Newsletters
    • FAQ
    • P&I Research Center
    • Site map
    • Staff Directory
    Legal
    • Privacy Policy
    • Terms and Conditions
    • Privacy Request
    Pensions & Investments
    Copyright © 1996-2022. Crain Communications, Inc. All Rights Reserved.
    • Topics
      • Alternatives
      • Consultants
      • Coronavirus
      • Courts
      • Defined Contribution
      • ESG
      • ETFs
      • Hedge Funds
      • Industry Voices
      • Investing
      • Money Management
      • Opinion
      • Partner Content
      • Pension Funds
      • Private Equity
      • Real Estate
      • Russia-Ukraine War
      • SECURE Act 2.0
      • Special Reports
      • White Papers
    • Rankings & Awards
      • 1,000 Largest Retirement Plans
      • Top-Performing Managers
      • Largest Money Managers
      • DC Money Managers
      • DC Record Keepers
      • Largest Hedge Fund Managers
      • World's Largest Retirement Funds
      • Best Places to Work in Money Management
      • Excellence & Innovation Awards
      • WPS Innovation Awards
      • Eddy Awards
    • ETFs
      • Latest ETF News
      • Fund Screener
      • Education Center
      • Equities
      • Fixed Income
      • Commodities
      • Actively Managed
      • Alternatives
      • ESG Rated
    • ESG
      • Latest ESG News
      • The Institutional Investor’s Guide to ESG Investing
      • ESG Sustainability - Gaining Momentum
      • Climate Change: The Inescapable Opportunity
      • Impact Investing
      • 2022 ESG Investing Conference
      • ESG Rated ETFs
    • Defined Contribution
      • Latest DC News
      • DC Money Manager Rankings
      • DC Record Keeper Rankings
      • Innovations in DC
      • Trends in DC: Focus on Retirement Income
      • 2022 Defined Contribution East Conference
      • 2022 DC Investment Lineup Conference
    • Searches & Hires
      • Latest Searches & Hires News
      • Searches & Hires Database
      • RFPs
    • Performance Data
      • P&I Research Center
      • Earnings Tracker
      • Endowment Returns Tracker
      • Corporate Pension Contribution Tracker
      • Pension Fund Returns Tracker
      • Pension Risk Transfer Database
      • Future of Investments Research Series
      • Charts & Infographics
      • Polls
    • Careers
    • Events
      • View All Conferences
      • View All Webinars
      • 2022 Retirement Income Conference
      • 2022 Managing Pension Risk & Liabilities
      • 2022 WorldPensionSummit