Why Is Talent Mobility in Public Funds Accelerating as Renowned Veteran Cao Mingzhang "Goes Private" to Take Charge?

At an age when many are preparing for “retirement,” veteran value-oriented public fund manager Cao Mingchang has chosen to start anew.

On the evening of March 14, this star fund manager, who left China Europe Fund over a year ago, officially announced the establishment of Shanghai Pujiao Private Fund Management Co., Ltd. (hereinafter referred to as “Pujiao Assets”). The company had completed registration with the Asset Management Association of China the day before. This marks the formal start of Cao Mingchang’s private fund entrepreneurial journey after nearly 30 years in the industry.

Cao Mingchang’s transition coincides with another peak in talent movement within the public fund industry.

Data shows that by 2025, 469 public fund managers will have left their positions, a record high. Among career choices, “going private” remains a popular option for star fund managers. As of now, the number of fund managers who have “gone private” exceeds 850. However, whether these former stars can replicate their past achievements in the private sector still requires time and performance to verify.

Cao Mingchang’s Private Fund Venture Settled

According to the China Securities Investment Fund Industry Association, Pujiao Assets was established in October 2025 with a registered capital of 14 million yuan, located in Hongkou, Shanghai, and officially registered on March 13 this year. Cao Mingchang is the actual controller, serving as the legal representative, general manager, executive director, and investment director.

From the equity structure, Cao Mingchang holds an absolute controlling stake. He directly owns 74% of Pujiao Assets, and Shanghai Zhongpu Yuan Enterprise Management Partnership (Limited Partnership), in which he holds 60%, also owns 20% of the company. In other words, Cao Mingchang’s total shareholding reaches 86%.

Pujiao Assets has seven full-time employees registered, half of whom have experience working at China Europe Fund, including compliance and risk control head Huang Lin, who previously worked at the Shanghai Securities Regulatory Bureau for eight years and then at China Europe Fund for seven years in supervisory roles; Wang Mei, Liu Hanbing, and others also have backgrounds at China Europe Fund. The team also includes professionals from firms such as Zhonggeng Fund, Yimin Fund, and Bank of Communications Schroder Fund.

As a star value-oriented fund manager in China’s public fund industry, Cao Mingchang’s name is well known among investors. Public information shows that since 1996, he has worked at Junan Securities, Minfa Securities, Hongta Securities, Bairui Trust, New China Fund, China Europe Fund, and others, with nearly 30 years of experience, including over 18 years as an investment manager.

During his early tenure at New China Fund, Cao Mingchang managed the New China Select Dividend A, which delivered impressive performance, with a total return of over 515% during his nearly nine years there. After joining China Europe Fund in 2015, he became one of the core equity investment figures, managing assets once exceeding 20 billion yuan.

In January last year, Cao Mingchang left China Europe Fund, at which time the total assets under management were 4.897 billion yuan. During his tenure, he managed seven products, all with returns exceeding 20%, with the highest being China Europe Fenghong Shanghai-Hong Kong-Shenzhen A, which accumulated a 126.6% return over more than four years.

In a letter to investors released on the evening of March 14, Cao Mingchang explained his motivation for establishing a private fund at this stage of life. He said this venture is not about chasing trends but about continuing the practice of value investing. “Value investing is the backbone and bridge of this continuation.”

Regarding the company name, he also provided an interpretation: “Pu” refers to uncarved jade, symbolizing undervalued companies with potential, and also representing the original intention of adhering to value investing; “Bridge” signifies connection, aiming to build a bridge between capital and potential companies through value investing.

In the face of current market rotation and hot spots, Cao Mingchang reaffirmed his consistent investment philosophy: investing is never a 100-meter sprint but a marathon that lasts a lifetime. “Running fast is not the goal; running far is the purpose.” He plans to continue pursuing high cost-performance (return-to-risk ratio) strategies in the future.

Talent Movement Accelerates

In fact, Cao Mingchang’s move to private funds is not an isolated case but a vivid reflection of the increasing talent flow in the public fund industry in recent years.

According to First Financial, over the past five years, more than 300 public fund managers leave their positions each year. Under the backdrop of salary caps, industry reforms, and other factors, the pace of fund manager turnover has accelerated further. In 2025, the number of departing fund managers reached 469, a new high, increasing by over 30% year-on-year.

Not all departing public fund managers choose to go private, but this path is undoubtedly an important career transition for many, including some with excellent performance and high market recognition. Data from Private Equity and Private Fund Network shows that as of the end of January 2026, there are 859 fund managers who have “gone private,” with 87 of them affiliated with top private equity firms.

Industry insiders believe that more attractive compensation incentives, flexible investment decision-making autonomy, and self-challenge are main reasons for some public fund managers to go private. “They want to try more possibilities and see where their abilities can reach,” said a fund manager with relevant experience, which is a core consideration in their career choice.

There are mainly two forms of “going private”: one is to establish a private fund independently, and the other is to join an existing mature private platform. For example, Qiu Guolu, founder of Gao Yi Asset Management and former investment director at Southern Fund, and Zhou Yingbo, a former star fund manager at China Europe Fund, who has created Shanghai Yunzhou; or Dong Chengfei, a former star fund manager at Xingzheng Global Fund, who joined the billion-yuan private firm Ruidun Assets. It is also known that Zhang Yifei, a fixed income star who left Anxin Fund, is likely to join a private fund next.

“Joining a mature platform allows sharing of existing research resources and operational frameworks, enabling focus on investment without being distracted by governance and daily operations. Fund managers also have more discretionary power over investment portfolios compared to public funds; starting a private fund gives more control over governance, team structure, and equity arrangements,” said a financial industry analyst. “Both models have their advantages and disadvantages.”

Generally, the “public to private” phenomenon is closely related to market cycles. “Historically, several waves of public-to-private transitions have occurred during bull markets and tend to quietly end as the market peaks,” said one industry insider. For example, in 2007, 2015, and 2021, the number of fund managers leaving reached peaks, mostly from research and investment roles.

“The underlying logic is simple: fund managers tend to achieve outstanding performance in bull markets, attracting more market capital, which gives them confidence to seek broader and more自由的成长平台；而在市场低迷时，基金经理更倾向于韬光养晦，等待合适的机会,” explained an investment manager in Shanghai.

However, whether star fund managers can replicate past success after “going private” still needs time to prove. “How much of the performance is due to the manager’s own ability, and how much is due to the platform and market environment?” an insider from a major fund company told First Financial. The comprehensive support from large public fund firms—research teams, trading systems, brand backing, sales channels—significantly contributes to fund performance.

Compared to public funds, private funds are more flexible in investment decisions but still face uncertainties in ownership structure, corporate governance, and back-office strength when compared to established public platforms. “From past cases, the performance variance among different public star fund managers after moving to different private platforms can be quite large,” he added.

“Talent flow is an inevitable part of industry development. Investors should view star fund managers’ career shifts rationally,” said a public fund industry professional. “Public fund institutions are accelerating their transformation toward team-based platforms, exploring incentive mechanisms suited to their culture and characteristics. But how to attract, cultivate, and retain top talent remains a key long-term challenge for the industry.”

(This article is from First Financial)