"Private Equity Witch" Li Bei's Letter to Investors: Fund Net Value Significantly Declines, Strongly Warning to Be Cautious When Pursuing AI

BlockBeats News, June 22 — On June 21, Li Bei, founder of Shanghai Banhua Investment Management Center, issued an open letter to investors, disclosing that the fund’s equity positions in the four major directions of energy, real estate, consumer, and building materials have all seen sharp declines, and that the net value has experienced a significant pullback. The fund’s current net equity position is 50%. It has already moderately reduced its positions and cleared holdings that do not have enough high certainty.

In her letter, Li Bei frankly acknowledged that the relevant positions have recently been under clear pressure, and that the pullback in domestic demand and the real estate direction has exceeded expectations. The passage drawing the most attention in the letter directly addresses the current market sentiment: she said she fully understands investors who have lost patience, and respects the choice of those who want to redeem the fund while holding cash and waiting, but for investors who want to redeem funds and then chase the surge in AI, she said, “Even if you curse me, I still want to advise you—be very cautious.”

Regarding the logic of not chasing AI, Li Bei clearly pointed out that the trigger conditions for the bursting of the AI bubble have already appeared—represented by the annualized revenue growth rate of Anthropic; the revenue growth rate of the most downstream model companies has noticeably slowed, and by the end of the year it will most likely be below the market’s earlier optimistic expectations. A further downward adjustment in expectations for capital expenditures is also very likely. She also noted that the current AI industry chain is in the stage of “high profitability and valuation, leading indicators falling, and lagging indicators still rising,” which, in theory, is a window to gradually withdraw rather than to chase more.

As for her own holdings, Li Bei insists that the valuation of domestic-demand-related leading companies is extremely low at present. The P/E ratio of consumer-sector leaders has fallen from more than 50 times at the peak to less than 10 times. Even if domestic demand remains in a bottoming-and-oscillating pattern for the long term, over a two-year timeframe it can still generate solid absolute returns. Once domestic demand rebounds or real estate sees policy support that exceeds expectations, it is expected to quickly achieve significantly higher excess returns.