Under the “internal volume” of the public offering industry, the “unemployment” risk faced by fund managers may not be poor performance, but the management scale is too small.
Chinese reporters of securities companies noted that due to the frequent fund liquidation of small and medium-sized fund companies, many fund managers will face the embarrassment of “no foundation to manage”. On February 23, after a winding up announcement, a public offering person in China noticed that he may have entered the state of “unemployment” in the post of fund manager. At present, the company has not appointed him as the fund manager of other public offering products. Previously, there had been the phenomenon that the fund manager resigned quickly after the liquidation of fund products was terminated.
blue chip fund manager becomes “light pole commander”
Beixin Ruifeng fund company announced on February 23 that according to the fund law, fund contract and other relevant provisions, the flexible allocation of Beixin Ruifeng Huafeng fund has triggered the termination of the fund contract. Beixin Ruifeng Fund Management Co., Ltd. shall terminate the fund contract and perform the fund property liquidation procedures according to law after the above termination occurs. The last operation date of Beixin Ruifeng Huafeng flexible allocation fund is February 22, 2022, and it will enter the liquidation procedure on February 23, 2022.
After the above related fund products enter the liquidation procedure, it also means that Lu Ping, the fund manager of Beixin Ruifeng Huafeng flexible fund allocation, has entered the state of “unemployment”. Up to now, Beixin Ruifeng fund company has not appointed Lu Ping as the fund manager of other public offering products.
According to the fund prospectus, Lu Pingyuan, the deputy general manager of the R & D Department of China Merchants Securities Co.Ltd(600999) , joined Beixin Ruifeng Fund Management Co., Ltd. in April 2020, and then began to serve as the public fund manager of Beixin Ruifeng and the fund manager of the two funds.
The first public fund product managed by Lu Ping is Beixin Ruifeng Xingrui flexible allocation fund. Lu Ping served as the fund manager of the fund on October 12, 2021. Two and a half months later, the fund was wound up and terminated on January 18, 2022. At this time, the fund managed by Lu Ping was only Beixin Ruifeng Huafeng flexible allocation fund. Unexpectedly, the fund was also terminated due to its small scale.
In a short period of one month, the liquidation and termination of the two fund products under management also means that Lu Ping, the fund manager of the fund, has actually entered the state of “unemployment”.
It is noteworthy that Lu Ping’s performance during his tenure as a fund manager can be called excellent. He managed Beixin Ruifeng xingruiling allocation fund, which lasted 98 days from taking office to the termination of fund liquidation, with a cumulative yield of 5.28%. The flexible allocation fund of Beixin Ruifeng Huafeng managed by Lu Ping has served a total of 119 days, with a cumulative yield of 31.98%.
liquidation brings the risk of “unemployment” of fund managers
In fact, there are many fund managers facing the risk of “unemployment” because of scale rather than performance.
On February 23, deppon fund company issued an announcement to remind that deppon quantitative preferred stock securities investment fund has had a net asset value of less than 50 million yuan for 40 consecutive working days, which may trigger the termination of the fund contract. The announcement stressed that, according to the provisions of the fund contract, if the number of fund unitholders is less than 200 or the net asset value of the fund is less than 50 million yuan within 60 consecutive working days after the fund contract takes effect, the fund manager shall enter the liquidation procedures and terminate the fund contract in accordance with the provisions of the fund contract without convening a general meeting of fund unitholders. It is reported that the net asset value of the fund has been less than 50 million yuan for 40 consecutive working days.
Wu Zhipeng is the fund manager of deppon quantitative preferred stock fund. In mid August last year, the fund contract of deppon quantitative cutting-edge fund, another fund he managed, was terminated due to its small scale. In addition, Wu Zhipeng also manages many products such as Debang Minyu progressive quantitative, Debang quantitative hedge and Debang Shanghai Stock Exchange G60 composite index enhancement fund. Although there are many fund products under management, each one is very small. In fact, Debang Minyu progressive quantitative also issued a prompt that can trigger the termination of the fund contract in April last year, It also means that many funds under Wu Zhipeng’s management have potential liquidation and termination risks.
The previous resignation wave of fund managers under PICC assets is also related to the liquidation of some of its funds. The Chinese reporter of the securities firm noted that the company’s resigned fund managers Liang Ting, Wei Yu and Zhang Wei are the fund managers of PICC Tianyi’s 6-month regular bond fund, PICC Tianli’s 9-month fixed bond fund and PICC Xinxiang short-term debt bond fund. These three funds have been liquidated and terminated. For example, after the termination of the fund, PICC Xinxiang short-term debt managed by Zhang Wei, He announced his resignation after only half a month.
It is obvious that the “Involution” effect of the public offering industry has led to the frequent termination of fund liquidation, and the resignation of fund managers is also closely related to fund liquidation.
head funds were also affected
Obviously, the “unemployment” risk of fund managers lies not only in whether the fund performance matches the market, but also in the continuous flow of funds to a small number of core products of head funds after the public offering industry enters the “inside volume” state. This has also led to many small and medium-sized fund companies facing that it is always difficult to make large-scale fund products, and the scale is too small, which may lead to further liquidation and termination risk of such fund products, resulting in the possible loss of investment and research talents.
According to the data, about 20 funds have announced the termination of liquidation since 2022, and in 2021, the number of fund liquidation reached 249, an increase of 40% over 2020, a new record in recent three years. Related to this, statistics also show that the number of fund managers leaving their jobs also reached a new high in 2021, with more than 300 fund managers leaving their jobs last year.
Resigned fund managers and liquidated funds are concentrated in small and medium-sized public offerings to a considerable extent. However, under the “internal roll” effect, a similar situation began to appear in the product industry of large-scale public offering. Chinese reporters of securities companies noted that among the fund companies whose release of fund products may trigger the termination of contracts, there are also some products of large head fund companies.
On February 23 and February 22, five super large head public fund companies released risk tips that their fund products may trigger the termination of fund contracts due to their small scale.
A large fund in the South announced on February 23 that the contract effective date of China Securities Internet Index Fund is December 1, 2020. As of February 21, 2022, its net asset value has been less than 100 million yuan for 20 consecutive working days. If the net asset value of the fund is less than 100 million yuan for 30 consecutive working days by the end of March 7, 2022, the termination agreed in the above fund contract will be triggered, the fund contract shall be terminated, and the fund manager will liquidate the fund in accordance with relevant laws and regulations and the fund contract.
Another large fund also disclosed that if the net asset value of its home appliance ETF fund is less than 50 million yuan for 50 consecutive working days as of March 22, 2022, the fund will enter the liquidation procedure according to the fund contract.
Industry insiders believe that the disclosure of relevant products of the head public offering giant may lead to the termination of the fund contract due to its small scale, which is enough to explain the survival state of small and medium-sized public offering funds, especially the universality of fund liquidation risk. However, for the above-mentioned head public offering giants, the possible liquidation risk of one or two funds will not affect the career space of relevant fund managers. Such head fund companies have rich product lines, a large number of existing old funds and products to be issued, and a strong resource platform is enough to attract fund managers to work on other products.
the liquidation of private placement may be more deadly
The impact of fund liquidation on fund managers may only be “unemployment” or resignation in the field of public funds. In the field of private placement, it may be the closure or even the end of your career.
“If the fund is wound up, it can only be dissolved and closed down,” a private equity fund manager in Shenzhen told the Chinese reporter of the securities firm that the only private equity product of the company was issued in 2021, and the company was also equipped with some researchers. However, in the market of 2021, the product had a large loss, which was close to the early warning line of winding up. He stressed to reporters that at present, the fund can only do it slowly according to the 30% position. If it loses to the liquidation line, the company can only dissolve all personnel. “It’s a little troublesome. It’s better to do it yourself,” he stressed to reporters.
There are more extreme phenomena in the liquidation events in overseas markets. In April last year, a top private equity fund manager on Wall Street chose to end one month after his products were forced to liquidate. Charles de vaulx, the manager of legendary value investment fund, committed suicide by jumping from the 10th floor of 717 Fifth Street in the office of international value consulting company on April 26, 2021. Charles de Vaux had just turned 59, and his fund was wound up a month ago.
