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Previously, rumors of "star fund manager Qiu Dongrong's resignation" were rife, and the product recruitment in May once again triggered market speculation about Qiu Dongrong's resignation. Now, the news has finally come true.

On July 21, Zhonggeng Fund released several announcements, announcing that Qiu Dongrong would resign from all managed products and his position as deputy general manager of the company for personal reasons. A reporter from China Business News verified with an industry insider that Qiu Dongrong is currently going through the resignation process.

Caixin has previously reported on this. According to the reporter, Qiu Dongrong had planned to leave in April this year and had communicated with the company at that time, but because he still had products in the closed period, he had not yet entered the formal resignation process. This product refers to the Zhonggeng Hong Kong Stock Connect Value Fund, which was established on January 11, 2023. The 18-month closed period has expired and has been converted to an open-ended fund, which also allows Qiu Dongrong's resignation to continue to move forward.

"He (Qiu Dongrong) said that due to his busy career, he has not had a proper vacation in all these years, so he wants to return to his family, spend time with his children and rest for some time." An informed source told China Business News reporter.

Regarding Qiu Dongrong's resignation, Zhonggeng Fund said, "We sincerely thank Mr. Qiu Dongrong for his outstanding contributions during his tenure and for his valuable efforts in the construction and improvement of Zhonggeng Fund's undervalued value investment strategy system." Qiu Dongrong also responded with more than 350 words of thanks and summary on his WeChat Moments.

Going through the resignation process, equity pending

According to the announcement, Qiu Dongrong resigned as the fund manager of five products including Zhonggeng Value Pilot from July 19 due to personal reasons, and he will no longer serve as the deputy general manager of Zhonggeng Fund. Since April this year, rumors of Qiu Dongrong's resignation have sparked market speculation twice, and now the mystery has been revealed.

As a 10 billion fund manager, Qiu Dongrong previously entered the senior management of Zhonggeng Fund because of his "excellent performance". As the deputy general manager and chief investment officer of Zhonggeng Fund, Qiu Dongrong is also a shareholder of the company, holding 19.46 million shares and owning 9.73% of the equity. So, how will this part of the equity be handled after he leaves? "This part is still under discussion." The aforementioned insider told the reporter of Yicai.com.

In the industry's view, the deep connection between the two is also reflected in the fact that Qiu Dongrong alone has taken on the scale of the company. Data shows that as of the end of the second quarter of this year, Zhonggeng Fund had a total of 6 products with a total net asset value of 18.972 billion yuan; Qiu Dongrong alone managed or co-managed 5 products with a total scale of 14.708 billion yuan, accounting for nearly 80%.

The reporter noticed that the second quarter report just released showed that although Qiu Dongrong had not officially announced his resignation, a lot of funds were accelerating their exit. Wind data showed that as of the end of the second quarter, Qiu Dongrong's managed scale decreased by 5.146 billion yuan month-on-month, which was the quarter with the largest scale reduction since he managed the above five funds in the first quarter of 2021.

Specifically, the fund shares of Zhonggeng Value Pilot and Zhonggeng Small Cap Value have shrunk by 31.44% and 43.73% respectively. It is worth noting that the annual report data last year showed that the proportion of institutional investors holding these two products exceeded 45%. In addition, the fund shares of Zhonggeng Value Quality One-Year Holding and Zhonggeng Value Flexible Allocation, which are held by more than 80% of individual investors, have also decreased by 18% to 20%.

In terms of performance, Wind data shows that as of July 19, the cumulative returns of Zhonggeng Value Leadership and Zhonggeng Small Cap Value since their establishment were 115.61% and 100.75% respectively; the cumulative returns of Zhonggeng Value Flexible Allocation and Zhonggeng Value Quality after one-year holding were 90.75% and 39.76% respectively; and the cumulative return of Zhonggeng Hong Kong Stock Connect Value, which has just been "unblocked", is -15.5%.

Who is the successor?

According to the announcement, after Qiu Dongrong leaves office, the three products, namely Zhonggeng Value Leader, Zhonggeng Value Flexible Allocation and Zhonggeng Value Quality One-Year Holding, will be managed separately by the previously hired fund managers Liu Sheng and Wu Chenggen respectively. The Zhonggeng Hong Kong Stock Connect Value managed separately by Qiu Dongrong will be taken over by the "new generation" fund manager Sun Xiao, and Zhonggeng Small Cap Value will be managed by Zhonggeng Value Pioneer Fund Manager Chen Tao.

Among the succeeding fund managers, Wu Chenggen has the longest tenure as an investment fund manager with 4.13 years. Public information shows that he joined Zhonggeng Fund in January 2019, and co-managed Zhonggeng Value Flexible Allocation with Qiu Dongrong from June 3, 2020. On May 11 this year, he took over Zhonggeng Value Quality One-Year Holding.

It is understood that Wu Chenggen is one of the fund managers independently trained by Zhonggeng Fund's low-valuation value investment strategy system. He has rich experience in cross-asset research and is good at portfolio management. His circle of competence is highly integrated with the low-valuation value investment strategy system. Wind data shows that as of July 19, the interval returns of the above two products since Wu Chenggen participated in the management were 59.04% and -8.14% respectively.

Liu Sheng joined Zhonggeng Fund in July 2018 and is currently the director of the investment department and research department. Zhonggeng Value Pilot is the first public fund product he manages. The reporter found out from the information that Liu Sheng is a researcher in the cyclical industry and is good at combining industry trends, company quality, valuation pricing and other aspects to explore investment opportunities from the bottom up.

Sun Xiao is still a new face in the market and has not publicly managed fund products before. According to information, he has been engaged in securities research and investment management since July 2018, and joined Zhonggeng Fund as a Hong Kong stock researcher in the investment department research department in May last year.

Zhonggeng Fund said that Sun Xiao has rich experience in Hong Kong stock and overseas investment research and has a diversified investment vision. "Investing in Hong Kong stocks requires more solid research basics, a more focused research perspective on fundamentals, and more agile investment decisions", which is also the advantage of managing Hong Kong stock products.

Among them, Chen Tao is the only fund manager who has independently managed products. As of now, he has been an investment fund manager for less than three years. As of July 19, the cumulative return of Zhonggeng Value Pioneer since its establishment in August 2021 was -18.04%, and the latest scale was 4.264 billion yuan.

"Although the current fund manager teams have different circles of competence based on the underlying unified low-valuation value investment strategy system, what they have in common is that they have a deep understanding of value investment and the strategy system. They are an echelon-type fund manager team that is highly compatible with the low-valuation value investment strategy system," said Zhonggeng Fund.

Editor on duty: Xiaoyang