Pinpoint Asset Management (Pinpoint; Chinese: 保銀資產管理; pinyin: Bǎoyín Zīchǎn Guǎnlǐ), is a Chinese hedge fund management firm headquartered in Hong Kong with its other main office based in Shanghai. It is one of the earliest hedge funds established in Mainland China.
 | |
Native name | 保銀資產管理有限公司 |
|---|---|
| Company type | Private |
| Industry | Investment management |
| Founded | 1999 |
| Founder | Wang Qiang |
| Headquarters | International Finance Centre, Central, Hong Kong |
Key people | Wang Qiang (Chairman) Zhang Zhiwei (President) |
| AUM | US$3.7 billion (2020)[1] |
| Website | pinpointfund |
| Footnotes / references [2] | |
Background
editPinpoint was founded in 1999 by Wang Qiang. It originally grew out of a Shanghai-based wealth management business that ran managed accounts for friends and family that invested in the China equities market.[3][4]
As the accounts grew, Pinpoint received increased investor demand for a China long/short equity fund. In 2005, it launched its first fund, the Pinpoint China Fund. At the time there were only 10 mainland Chinese-owned hedge funds. The funding came from the offshore assets of high-net-worth individual with 60% living in China and the rest living in the United States, New Zealand, Hong Kong and Australia.[3][4][5]
Initially A-shares could not be legally shorted so the firm shorted securities in Hong Kong and used other overseas assets. As a result, Pinpoint pursued more long opportunities than short positions. 60% of assets were in A-shares with the remaining being in Hong Kong equities or American depositary receipts. Because of foreign exchange controls, Pinpoint had to invest through the Qualified Foreign Institutional Investor quota system which was 10 times more expensive compared to local brokerages. The fund posted a 47% net return in the first four months. It made returns of 17.43%, 129.18% and 100% in the years 2005, 2006 and 2007 respectively.[3][4][5]
When Pinpoint analysts analyse an individual companies, the three top considerations are certainty, safety and growth. Networking played a crucial role in the firm's success as it was needed for analysts to be able to perform proper due diligence on companies. As more financial instruments were approved, Pinpoint launched new funds with different strategies. Pinpoint also engaged in private equity investing.[3][4][5]
While Pinpoint has reported significant gains compared to its peers such as its China fund returning 23% in 2017, and its multi-strategy fund returning 9.8% in 2020, it has also reported losses such as in 2022 where its China fund reported a loss of 13%.[1][6][7]
In 2022, Pinpoint opened an office in Singapore as part of its expansion. It also has offices in India and Japan.[8]
In November 2023, it was reported Pinpoint was following larger hedge fund peers like Citadel LLC and Millennium Management, LLC by charging clients additional fees to cover employee costs. It created three new share classes using this structure.[9]
Pinpoint reported a loss over 6% for the year 2023. However as of April 2024, it has produced a return of 6% since start of the year.[10]
References
edit- ^ a b Xie, Yu (28 July 2020). "Chinese Hedge Funds Shine in Volatile Year". Wall Street Journal.
- ^ "Form ADV" (PDF). SEC.
- ^ a b c d Fieldhouse, Stuart (September 2008). "Pinpoint Investments". The Hedge Fund Journal. Retrieved 24 January 2024.
- ^ a b c d "Interview with Wang Qiang, CIO at Pinpoint Asset Management Limited". www.eurekahedge.com. March 2017. Retrieved 24 January 2024.
- ^ a b c Anderlini, Jamil (6 May 2006). "Mainland hedge fund blazes path into future". South China Morning Post. Retrieved 24 January 2024.
- ^ Fletcher, Laurence (12 September 2017). "Hedge Funds Prosper on China Tech But Bubble Fears Emerge". Wall Street Journal.
- ^ Hu, Bei (19 January 2023). "Asia Hedge Funds Avert Disaster on Scale of Financial Crisis With China's Reopening". Bloomberg News. Retrieved 24 January 2024.
- ^ Hu, Bei (2 December 2022). "Singapore Chips Away at Hong Kong's Hedge Fund Dominance". Bloomberg News. Retrieved 24 January 2024.
- ^ Hu, Bei (15 November 2023). "Hedge Funds Copy Citadel Fee Model in Fight for Top Asia Traders". Bloomberg News. Retrieved 24 January 2024.
- ^ Saacks, Bradley. "China hedge fund Pinpoint is bouncing back in 2024 after years of poor performance". Business Insider. Retrieved 18 May 2024.