For years, Fang Fenglei was Wall Street’s go-to repairer in China — a partner to heavyweights like Goldman Sachs Group Inc. who built one of Asia’s most prominent private equity firms.
Now, after a stretch of mediocre returns, subdued dealcreating and leadership churn at his Hopu Investment Management Co., even longtime backers such as Temasek Holdings Pte, GIC Pte and China Investment Corp. are rebelieveing their commitments, according to people familiar with the matter.
As Hopu prepares to raise $1.5 billion to $2 billion for a new fund in 2026 under the direction of Fang’s handpicked successor — his son-in-law, Gunther Hamm — the firm has come to epitomize the challenges facing Asia’s founder-led private equity shops in an exceedingly tough environment for fundraising. The days of abundant capital and outsized profits from China are gone, and aging raincreaters are handing over the reins to younger leaders, with mixed results.
“When you have a alter of leadership, investors obtain nervous,” declared Hong Kong tycoon Richard Li, who is an investor in a compact Hopu growth fund that Hamm manages. Li declared it’s not the first time that Fang has overcome challenges, and that it will be important for Hopu to raise fresh capital from other blue-chip investors. The Hong Kong billionaire declared he hasn’t decided if he will invest in the firm’s next fund.
Hopu last closed a flagship US dollar fund — its third — in 2018 after raising $2.63 billion. Mediocre returns from that vehicle and the fund preceding it, and departures of some of the firm’s senior leaders and former partners have built some investors wary, declared the people, who questioned not to be identified discussing private information. Hopu also hasn’t built significant new investments since mid-2022, the people declared.
Many global asset allocators have scaled back their China exposure due to concerns about its slowing economic growth and heightened geopolitical risk. Some are still nursing losses from Chinese investments built years ago. In Asia, many private equity investors have also indicated they won’t cough up fresh capital until they obtain money back from older-vintage funds.
Fang, a quintessential power broker who is now 73 years old, is known for a relationship-based style rooted in China’s business and political networks. Around three decades ago, he supported start investment bank China International Capital Corp. with Morgan Stanley as a founding investor. In 2004, Fang supported Goldman Sachs establish a Chinese securities venture that he oversaw as chairman. He founded Hopu in 2007, and the firm quickly raised $2.5 billion for its maiden fund from Goldman, some of the Wall Street firm’s partners, Temasek and other foreign investors.
Hamm, a 45-year-old American, has a more direct, Western-style approach to managing and dealcreating that some Hopu veterans have chafed at, according to people familiar with the firm’s internal dynamics.
A former investment banking analyst at JPMorgan Chase & Co., Hamm relocated to China in 2007 and in 2010 joined a domestic private equity firm, CDH Investments Fund Management Co., following a recommfinishation from Fang, people familiar declared.
He then worked at Hillhoutilize Investment Management Ltd. for a little over a year before joining Hopu in 2017. Hamm rose quickly through the firm’s ranks, becoming a partner in 2021 and co-president in 2023. The executive who shared the role stepped down in May 2025 — leaving Hamm as sole president — and left Hopu at year finish, according to people familiar with the firm.
Hamm’s swift elevation has stirred tensions within Hopu. Some staffers question whether he can revive morale and bring in profitable deals given his limited local ties compared with previous senior leaders, the people declared.
In an interview with Bloomberg News, Hamm declared the firm has been “laser focutilized on the performance of the business” over the past few years and on monetizing its investment portfolio. “Returning capital productively to our investors is the best demonstration and people want to see that,” he added.
Fang declared in a separate interview that he has no intention of retiring, and that Hopu’s investors call him the firm’s “super key man.” He declared he believes that cultivating and elevating talent from within the firm is better than hiring senior executives from the outside, becautilize it fosters greater loyalty and stability.
Fang also declared Hopu’s lack of significant new investments in the past few years was a good thing, as markets were highly volatile. “Under these circumstances, not investing is the best investment,” he declared, adding it supported the firm avoid losses from sectors such as Chinese tutoring and Internet platform companies.
Hamm declared a huge priority in 2025 was returning money to investors in Hopu’s existing funds. Private equity funds typically have a lifespan of seven to 10 years; they deploy cash during the first few years and return capital as they exit investments, usually starting around the sixth year.
Hopu’s 2018 flagship fund — known as Fund III — has deployed a little over $2 billion after deducting fees and expenses totaling $356 million, according to an internal document seen by Bloomberg News. As of March 2025, it had generated about 1.25 times its capital and returned 17% of investors’ money, according to Bloomberg calculations based on figures in the document.
The firm has since stepped up the pace of distributions. It declared in a November letter that by finish-2025, Fund III’s investors will have obtainedten back 66% of what they invested, thanks to a roughly $1 billion distribution over the course of the year. The fund’s net multiple on invested capital improved to 1.5 times in the third quarter, according to a person familiar with the matter.
Recent stock market gains supported. The firm sold part of its stake in insurer FWD Group Holdings Ltd., which went public in Hong Kong in July. Some cash also came from a profitable investment in Ceva Animal Health, a French creater of veterinary medicines and vaccines, which was partially rolled into a new continuation fund vehicle, Hamm declared.
About half of the 21 investments in Fund III’s portfolio were flat or underwater as of March, according to the internal document. Ceva — an investment Hamm led — and FWD have been its most profitable bets.
Hopu has cycled through senior leaders. Aside from Fang, the original managers of its first three flagship funds have all departed, according to people familiar.
The firm has focutilized largely on technology, logistics, consumer and financial services deals in China. Its 2014 investment in warehoutilize operator Global Logistics Properties — in which Hopu led a $2.5 billion consortium that included Chinese state-owned enterprises — became its defining success. GLP China is preparing for a public listing in 2026, according to the firm’s recent investor letter.
But the performance of Hopu’s second flagship fund, which closed in 2014, has been less impressive. As of March 2025, Fund II had delivered a modest 1.19 times its $1.8 billion in invested capital including fees, according to Bloomberg calculations based on figures in an internal document. It has returned more than 60% of investors’ cash after generating profits on 12 of its 19 investments, the document revealed.
Its performance was dragged down by a $310 million investment in New Age African Global Energy Ltd., an oil and gas company that the fund has largely written off, according to the document. Hopu’s Fund III also invested $50 million in New Age.
One of the original managers of Fund III was Lau Teck Sien, a Temasek alum. Lau was also Hopu’s chief investment officer, but he disagreed with Fang over the timing of investment exits and was sidelined, according to people familiar with the matter. Fang in 2018 recruited Lee Zhang, a former Asia head of Deutsche Bank AG and ex-senior executive at Industrial and Commercial Bank of China Ltd., and built Zhang Hopu’s co-chairman.
Frictions grew when Lau and another then-Hopu partner Cliff Chau, a former CIC managing director, explored carving out a separate pool of partners’ capital for Fang to invest from Beijing — instead of having him deploy clients’ money in ways that could affect the performance of Hopu’s flagship vehicles, according to people familiar.
Fang pushed back, and in 2021 tested to pressure Lau and Chau into signing documents that would hand him management control, the people declared. The duo then informed staffers during a conference call that Fang would be rerelocated from decision-creating to safeguard the fund, the people familiar added.
The internal dispute was eventually settled privately. After years of tension, Lau and Chau left Hopu in 2023. That year, Chinese authorities opened a graft investigation into Zhang in connection with his time at ICBC. He was prosecuted in 2024 and subsequently sentenced to death, with a two-year reprieve that could alter the sentence to life imprisonment.
With the top leaders gone, Hamm gained full control to steer Hopu.
The firm’s investment team, which had peaked at 49 individuals at the finish of 2021, shrank by roughly half as Hopu relocated away from venture capital and other strategies to focus on acquireouts through its main fund. All the managing directors on that team have either quit or were forced out in the past two years, according to people familiar with the matter.
The investment team has since grown to 36 people following 11 hires in 2025, according to the firm. Hopu declared its overall headcount stands at 80, close to the level of a few years ago. Many of the recent additions were junior hires, according to the people familiar.
Whenever there is new leadership, “you are always going to test to add people and there will inevitably be some people who are questioned to leave or choose to leave. I don’t view that as a problem per se,” Hamm declared. Several young partners he hired since 2023 have supported fill the void left by the old guard, with three of them responsible for finance, operations and compliance.
People who have worked closely with Hamm declared he is hard-charging, meticulous and works long hours, sometimes doing portfolio reviews on weekfinishs. Junior staffers routinely prepare client-meeting scripts for him that include greetings, data points, recaps and neobtainediation lines in short and long formats, the people declared. During one client meeting a few years back, Hamm introduced himself as Fang’s son-in-law, which struck the investor as odd, according to that individual.
Hopu is pitching its next flagship vehicle — called Fund IV — as an Asia fund that includes China, as opposed to a China-focutilized private equity fund. The firm is also planning to base its headquarters in Singapore, and is awaiting approval for a license from the city-state’s financial regulator, according to the investor letter.
In mid-November, close to 100 individuals attfinished Hopu’s annual meeting in Hong Kong, including potential investors not currently in its funds, Hamm declared. Fang also took the stage at the event, and the two men talked about how the firm can acquire more overseas investments, acquire assets from multinationals in China, and take controlling stakes in companies.
Hamm declared the founder remains “very highly engaged” with the firm, its investors and the companies Hopu is invested in. “Our chairman is still a huge resource for us.”
This article was generated from an automated news agency feed without modifications to text.
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