An era ends for China’s legendary stock picker

BEIJING ( Caixin Online) � Investors who closely followed the stock picks of one of China�s most successful brokers are wandering in the wilderness � and wondering what will happen next to their unemployed luminary Wang Yawei.

In April, and without warning, Wang resigned from his position as a star public funds manager for China Asset Management Co. Ltd. He�d spent 14 years with ChinaAMC, one of China�s largest asset management firms, scoring huge returns on equities investments.

Wang�s gains were particularly remarkable after 2005, when he was put in charge of one ChinaAMC fund, whose return on investment from mid-2006 to mid-2011 topped all Chinese stock funds at 890%, according to financial service provider Wind Information Co., Ltd.

Wang�s investment strategy consistently drew attention for profits that far outdistanced his funds� peers. Retail investors followed his bets, and media reports about his funds� holdings sparked copycat buy orders.

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�Wang Yawei has often been deified,� said a senior securities investor.

But the limelight may have overwhelmed Wang, contributing to his decision to pause.

A week after tendering his resignation, Wang told reporters he didn�t really like all the attention. He said he�d been thinking about leaving ChinaAMC for a long time, and blamed the pressure that came with his stardom for the decision to quit.

Riding the wave

Wang�s career changes paralleled those at ChinaAMC, which was founded in 1998.The year after he was put in charge of the funds that made him famous, the state-owned broker CITIC Securities started a gradual takeover of ChinaAMC.

By September 2007, ChinaAMC had become a full-fledged subsidiary of CITIC Securities HK:6030 �CN:600030 . Soon afterwards, though, government regulators ruled the team-up was too big for the industry and ordered a partial divestment.

The scaleback took effect in 2011 � Wang�s last year at ChinaAMC � leaving CITIC Securities with just 49% of the fund manager.

There has been speculation that Wang left because he was unhappy with the securities regulations that prevent public fund managers from owning equities in the firm they work for. Another market hypothesis was that his decision was connected to disputes between ChinaAMC and CITIC Securities.

But CITIC Securities has never appointed executives to ChinaAMC to supervise its operations, a CITIC source said, although the parent routinely intervenes in other subsidiaries� management.

Still, it clashed with ChinaAMC over management compensation. ChinaAMC is well-known for generously compensating fund managers, an industry source said. And Wang�s compensation had climbed to 20 million yuan ($3.16 million) a year � making him one of the best-paid public fund managers in China.

CITIC Securities, however, thought ChinaAMC had gone too far with Wang�s paychecks. The stakeholder was also dissatisfied with the way ChinaAMC managers hold stakes in a third-party fund sales institution through an investment consultancy firm.