Core Summary
A well-known private equity firm, Banxia Investment, has experienced a significant performance downturn this year, with several of its products recording their worst annual performances to date. The Banxia Stable Hybrid Macro-Hedging fund, for example, lost 24.5%—meaning an investment of 100 yuan would be reduced to only 75 yuan—with the largest weekly decline exceeding 15%. The firm’s management scale has also shrunk from over ten billion yuan to a range of 2-5 billion yuan. The poor performance is attributed to heavy investments in four sectors: energy, real estate, consumer goods, and construction materials, all of which have performed poorly this year. Despite this, Li Bei continues to hold a bullish view on real estate and a bearish outlook on AI. However, she has made several investment mistakes in recent years (such as selling bank stocks just as they began to rise and liquidating gold at a time when prices soared). Coupled with previous controversies over her high-priced courses, investors are actively withdrawing their funds as a result of these setbacks.
Detailed Analysis
1. Record-Lowing Performance and Shrinkage in Management Scale
Banxia Investment’s performance this year can be described as a dramatic decline:
- Product Losses Exceeding 24%: The Banxia Stable Hybrid Macro-Hedging fund, established in 2018, lost 24.5%, surpassing the previous record low of 20.49% set in 2023. Three other funds also suffered losses close to 20%.
- Net Asset Value Plunges: Taking the Stable Hybrid fund as an example, its net asset value dropped from 8.11 yuan on May 8 to 5.6 yuan by June 18, a decrease of 30% in just over a month, with some weeks experiencing declines of over 10%, and the worst week seeing a 15% drop.
- Management Scale Halved: Once a large-scale private equity firm, its assets have now been reduced to a much smaller range, indicating a transition from a major player to a smaller operation.
The direct consequence of these poor results is the departure of investors, as no one wants to see their money lose value.
2. Poor Portfolio Selection: Four Underperforming Sectors
In a letter to investors, Li Bei acknowledged that the sharp decline in net asset values was due to her heavy investments in sectors that performed exceptionally poorly:
- Real Estate (25% of Portfolio): The real estate sector index fell by 14.39% this year, and her bet on increased market share following a reduction in supply did not materialize; the expected turnaround has yet to occur.
- Consumer Goods (20% of Portfolio): The consumer goods sector was weak overall, with sectors such as home appliances and food and beverages showing little or even negative growth.
- Energy (7% of Portfolio): International oil prices were volatile, and domestic energy stocks performed poorly.
- Construction Materials (8% of Portfolio): With declining real estate demand, construction materials also saw a decline in sales.
It’s no wonder her funds suffered such heavy losses, as she invested in some of the least profitable sectors of the year.
3. Contrary to Market Trends: Bullish on Real Estate, Bearish on AI
Li Bei’s investment strategies are quite unconventional, but they have not been well-received by the market:
- Bullish on Real Estate: She has been advocating for a “once-in-a-decade opportunity” in the real estate sector since 2023 and claimed a turnaround at the beginning of this year, but it has yet to materialize. She argued that she held stocks in companies that outperformed the industry, regardless of policy changes. However, the overall performance of real estate stocks was negative, making it difficult for her investments to thrive.
- Bearish on AI: She predicted a bubble in the AI sector due to slowing revenue growth at American AI companies and several inherent issues (poor profit models, fierce competition in upstream equipment, and high goodwill risks). In reality, the AI sector performed well this year, with many investors embracing AI-related technologies. Her contrarian views led to missed opportunities for her funds.
4. Past Investment Mistakes: Wrong Calls on Bank Stocks and Gold
This is not the first time Li Bei has made mistakes:
- Bank Stocks: In May 2025, she viewed bank stocks as high-risk and reduced her holdings; however, the CSI Bank Index subsequently rose, resulting in a loss.
- Gold: At the beginning of this year, she sold all her gold positions, believing its long-term value was declining, but international gold prices soared to record levels (over $5,500 per ounce), leading to another wrong investment decision.
These mistakes have eroded investors’ confidence in her judgment skills and contributed to the shrinkage in her fund’s assets.
5. Controversy over High-Price Courses
Last December, Li Bei launched an investment course costing 12,888 yuan for the full package or 3,888 yuan per session, claiming it could teach ordinary investors how to achieve an annual return of 10%. This move sparked criticism: Why would a private equity manager focus on selling expensive courses rather than managing her funds effectively? She later stated that all course proceeds would be donated to a charity trust for educational purposes, but this did not address the fundamental doubts about her ability as an investor manager.
Conclusion
Li Bei and Banxia Investment are facing a dual crisis: plummeting performance and declining investor confidence. Poor results have led to a mass withdrawal of funds, while repeated mistakes and controversies over her courses have questioned her professional competence. Although she remains steadfast in her investment philosophy, the market’s actual outcomes have given her a poor rating. For ordinary investors, when choosing a fund, it is essential to consider not only past performance but also whether the manager’s strategies align with market trends. After all, going against the market often results in financial losses.