Quantitative Private Fund "Liquidation Suspicion"
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In the private fund industry, the founder (or founding team) of a private fund institution is often the core of the entire organization, supporting the company's development and continued existence.
Therefore, if the core team that has been working together closely for a long time suddenly “splits up,” it is often very sudden, very dramatic, and generates strong uncertainty and outside attention.
Over a year ago in the private fund industry, the “falling out” at S Private Fund (pseudonym, same below) was the most thought-provoking.
At that time, this institution, which managed over ten billion RMB, quickly soothed the impact of the event through a personnel change announcement and an explanation of a “peaceful breakup,” accompanied by relatively restrained language. The relevant parties also quickly returned to calm under the company’s strong reassurance.
But as time passed, new rumors began to emerge and quietly circulate...
Significant “Early Liquidation”
As a leading private fund in the industry, S enjoys fame and reputation in many situations.
Yet, like all other large quantitative institutions, these organizations—from structures to division of labor, from strategies to investment systems—are “black boxes,” with little information available.
Still, the sudden breakup of its core “trio” in 2024 was surprising. The highly educated founder W quietly exited, but Y and S, still the core members, continued managing the team. The entire process was extremely rapid and left no traces.
However, more turmoil followed. Some institutions reported that S Private Fund saw a large number of product liquidations around W’s exit, possibly reaching over a hundred, with cumulative liquidations exceeding half the historical stock of the company at that time.
This certainly cannot be ignored.
What Does “Early Liquidation” Mean?
In the operation of private equity funds, a product’s ending does not necessarily mean something abnormal, but the chosen method itself carries clues.
Operationally, private fund products usually end in two ways.
One is normal liquidation, where the product runs as per contract term and clears upon expiry.
The other is early liquidation, where the manager initiates the termination before the contract period is up.
Many S Private Fund products were liquidated early, thus attracting attention.
Another hard-to-define move was that S Private Fund also retained quite a few products at the same time.
If early liquidation usually corresponds to a major decision by the manager—for example, adjusting the company’s product line, anticipating a limit on strategies, or abrupt changes in market operation rhythm—
Then what does it mean if the institution also retains many products? And what’s the connection with the founder’s departure during this period?
“Unusual” Liquidation Data
With this in mind, Wallstreetcn Zishi Tang used samples of quantitative private funds managing over 20 billion RMB to sort through early liquidation situations among historical filed products.
Institutions with less than 10% early liquidation among products include: Wanyan Asset, Liangpai Investment, Century Frontier, Kuande Investment.
Among these, Wanyan Asset and Liangpai Investment have an early liquidation ratio below 5%.
Institutions with early liquidation ratios of 10%-20% include: Heiwing Asset, Yanfu Investment.
Institutions with ratios of 20%-30% are relatively concentrated: Jiukun Investment, Huansquare Quant, Jinde Fund, Inno Asset, Chengqi Asset, Zhuoshi Fund, Maoyuan Quant, Longqi Technology.
For institutions with above 30% early liquidation, there are: Lingjun Investment, Mingstone Fund, Qilin Investment, Mingxun Investment, Zhicheng Zhuoyuan, Tianyan Capital, Pingfanghe Investment; Pingfanghe's early liquidation ratio reaches 49.8%.
It should be noted: the above statistics are only based on filing information announced by the Asset Management Association of China, with statistical scope based on the main filing body of quantitative institutions. If a single controller has multiple related managers, statistics use the largest by AUM. Product number covers all historical self-issued and managed products, plus all with advisory management involvement.
Not an Industry Newcomer
If one narrows from the industry as a whole to a single institution, the differences revealed by the early liquidation metric become much clearer.
Take quantitative private fund S as an example.
Based on publicly filed information, the number of early liquidated products in its history accounts for about 54% of all filed products.
This ratio is, in horizontal comparison, much higher than most other quantitative institutions of similar scale, thus showing a product line operation mode that is difficult to describe as “routine.”
Public data shows S Private Quant was founded in 2018 before the big quant boom and joined the 10bn AUM club in early 2022.
Judging from its establishment date and scale evolution, it’s not a recent entrant, and likely does not face a phase marked by frequent early adjustments for exploration.
Overall Performance “Not Bad”
Given this, a natural question is: does such a high early liquidation rate stem from sustained performance pressure?
Publicly available data does not point directly in this direction.
According to Simuwang.com, S's representative products currently displayed publicly fall into the top-performing zone for peer strategies: typical “leaderboard” quality products.
From background, the institution’s investment team core members have served at international institutions such as D.E.Shaw, Goldman Sachs, etc.
Therefore, when “54% early liquidation ratio” and “publicly top-performing products” appear together, it is puzzling.
This is not enough for a firm conclusion, but it raises a suspense worth further probing:
Such large-scale product exits, at what stage did they occur, and what were the key time windows?
This needs finding clues among more detailed product and timeline information.
The “Frequent Clustering” of 2024
If the early liquidation of S Private Quant is considered on a timeline, 2024 stands out as a pivotal year.
Data shows: This year, S completed early liquidation of 107 products. In all its early liquidations, 2024 alone accounts for about half, making it the year with the highest concentration of liquidations.
Note: In China Fund Association disclosures, private products do not explicitly mark the “liquidation completion time”; in this article, early liquidation timing is approximated by “last updated fund info” date.
Multiple industry insiders said that this time point is usually close to product liquidation or entering the clearing process, with some indicative value.
Monthly distribution shows these 107 early liquidations are not spread out evenly across the year, but cluster in a few time windows.
Months with the most liquidations include:
March, 17
July, 11
August, 15
September, 17
November, 23
These five months accounted for 83 liquidations, covering about three-quarters of all early liquidations in 2024; other months saw single-digit counts.
Moreover, among the 107 products liquidated early in 2024, 9 survived less than one year from inception to liquidation.
This makes one pay more attention: what happened at the firm behind these months?
The Same Year Saw “Key Person” Changes
Looking back at 2024, aside from the large cluster of product liquidations, there were significant changes in management at S Quant.
Public info shows: Around mid-year, the firm underwent a rather “sudden” personnel change.
This quant platform was originally started by three founders; one, W, in charge of market and external affairs for the long-term, reportedly exited, and equity structure was swiftly adjusted—W’s equity was quickly transferred to the other founders.
Public disclosure described this as a “peaceful breakup,” emphasizing no impact on normal company operations.
But looking at timing and typical asset management practices, it’s not uncommon for a founder to leave but still enjoy shares and dividends.
Therefore, W’s departure seems more like a complete “severance” by the company. Such moves often occur amid “irreconcilable differences” among founders.
For example, another well-known quant—Mingstone Investment—saw two core founders publicly stand opposed in 2021, with diverging statements about shareholding and actual control. Eventually one left, and the other became the majority shareholder.
So what really happened at S Private Fund this time? Is everything as announced?
This does provoke some reflection.
Suspense Yet to Be Solved
Extending the timeline, some “historical nodes” start to take on new significance.
In the same year, S Private Fund also saw turnover in its compliance and risk-control leaders, both key positions as per regulatory filings.
Looking back, S Quant experienced multiple changes within the same year: On one hand, clustered product liquidations accounted for about half of all its early liquidations in a single year; on the other, internal management changes emerged in July, with founder W’s complete exit and a one-time equity restructure; meanwhile, the compliance and risk-control leader also changed around the same period.
At least, public info confirms: In 2024, this quant firm experienced simultaneous concentrated product exits and reshuffles in top management and compliance lines.
At the time, these changes could all be seen as phase adjustments, with no necessary linkage between them.
But as time goes by, when placed on a single timeline, their clustering in the same year and months becomes highlighted.
From an industry perspective, this case reiterates: Transparency around early liquidation of private fund products still has room for discussion and improvement.
Suspense may not need to be resolved immediately, but recording it truthfully matters.
Risk Warning and DisclaimerThe market has risks, and investments require caution. This article does not constitute personal investment advice and does not consider individual users’ investment objectives, financial situations, or needs. Users should consider whether any opinions, views, or conclusions in this article fit their specific circumstances. Investments made accordingly are at your own risk.```