In the fiercely competitive arena of quantitative private equity,Pansong Asset Management emerged as a dazzling new star,achieving remarkable growth in scale and quickly entering the ranks of firms overseeing over 10 billion yuan.

However,recent data disclosed by the Asset Management Association of China indicates that Pansong's management scale has receded from above 10 billion yuan to a range of 5 to 10 billion yuan.This shift is attributed to several factors that merit further exploration.

The Rapid Ascent of a New Quantum Star

Established in June 2022,Pansong Asset achieved registration with the Association by December of the same year.Subsequently,its scale exploded,with management surpassing 1 billion and 2 billion yuan in May and July of 2023,respectively.

By March 2024,its management exceeded 5 billion yuan,and by July,it transitioned into the realm of 10 billion yuan private equity funds,marking an extraordinary expansion in just two years—a feat rarely seen in the quantitative private equity sector.

Performance is critical for the growth of private equity firms.Pansong's rapid leap into the 10 billion yuan club can be attributed to its robust performance.According to a third-party platform,all 15 products displayed on their site have achieved positive returns since their inception.Among them,11 products established over a year ago recorded annualized returns ranging from 8.84% to 37.81%. In the ranking of top private equity returns compiled by this platform for 2024,Pansong secured second place with an impressive average return of 24.21%,attracting considerable investor interest.

Differentiating itself from other quantitative private equity entities that favor high-frequency strategies,Pansong Asset's core team focuses on low-frequency systematic investments,emphasizing medium to long-term value investing.Their longer forecasting periods and lower daily turnover rates mean they refrain from rapid trading.This investment approach relies on in-depth research and analysis of macroeconomic conditions,industry trends,and corporate fundamentals,constructing a portfolio that targets long-term stable returns.

In its operational execution,Pansong strictly adheres to a "fairness principle." The firm does not engage in proprietary products and pledges to avoid “soft commissions,” applying a consistent set of quantitative models across all products—including return models,risk models,and transaction cost models.Moreover,trading instructions for all products are generated by the company’s independently developed multi-account,multi-term investment optimization tool,ensuring fairness and consistency in investment decisions,thus mitigating potential conflicts of interest resulting from product disparities.

The appealing fee model is also a crucial factor that facilitated Pansong’s swift expansion.The firm's website lists a total of 22 categories of currently operating aggregate private equity fund products (excluding separate accounts).Among these,7 categories charge management fees ranging from 1% to 1.75%,but do not charge subscription fees or performance fees; 14 categories do not impose subscription or management fees,only charging a performance fee,with 8 index-enhanced products seeing a performance fee standard based on excess returns of 15% to 20%,while the other 6 categories range between 12% to 30% based on absolute returns. Notably,the “Pansong Long/Short Hedge Balanced Allocation No.1” product charges a 0.5% subscription fee plus a 0.5% management fee,while only imposing performance fees on the underlying assets.This diversified and flexible fee structure meets various investor needs and holds significant competitive advantage in the market.

Chain Reactions Triggered by Controversial Events

The first point of controversy arose when founder Zhang Xiao fell into a legal scandal.In 2024,Zhang was indicted by the U.S.District Attorney's Office in Massachusetts.The indictment alleged that in 2021,Zhang used a virtual private network (VPN) to access his employer's network from China,bypassing company controls to copy codes,projects,and research,sending the copies via a Chinese file-sharing application with intentions to establish his own investment firm in China.Despite Pansong’s statement in November 2024 declaring the charges baseless,and noting that Zhang has engaged an American law firm to protect his rights,and that the time frame in question preceded the firm’s establishment,this incident raised substantial market concerns and cast a shadow over its reputation.

Further disputes arose concerning company management and staffing.Around November 2024,several reports surfaced on social media about Pansong Asset,claiming “a company with over 20 employees has 100 interns,” with comments about excessive overtime and restrictions on napping during lunch breaks.In a roadshow in September 2023,Pansong representatives claimed the firm had 99 members,with 48 in the investment research team,while data from the Association indicated that Pansong currently employs only 51 full-time staff,highlighting a significant discrepancy.

Moreover,the Association's data revealed that among Pansong's 51 full-time employees,only 24 hold fund practitioner qualifications,marking less than half,with 12 obtaining their qualifications in 2024.Such controversies not only tarnish the firm's image but could also negatively impact talent recruitment,team stability,and business operations.

As a result of these factors,since November 2024,Pansong has put a halt on issuing new products.According to the Association,the latest registered product's date still reflects October 18,2024.Furthermore,three products registered in September 2024 have already undergone early liquidation.Amid a surge of quantitative private equity firms entering the CSI A500 track,the product “Pansong CSI A500 Index Enhancement Progress No.1 Private Securities Investment Fund,” registered in mid-October 2024,was renamed shortly after registration to “Pansong Core Asset Index Enhancement Progress No.1 Private Securities Investment Fund.” Such changes reflect the firm's struggle and adjustments in business development.

Despite Pansong Asset facing challenges such as a decline in management scale and reputational damage,there stands a chance for revival.The firm needs to actively respond to the litigation by clarifying facts through legal avenues and restoring market confidence.Internally,optimizing personnel structure,enhancing talent training and acquisition,and improving professional standards and stability of employees are crucial,alongside strengthening corporate governance.In terms of investment strategy,continuing optimization and innovation to enhance investment performance will help re-attract investor attention.

The quantitative private equity sector is fiercely competitive,with increasing regulatory scrutiny.If Pansong can effectively address the challenges it faces while strengthening its internal capabilities,it still has the potential to regain a foothold in the market,leading to a rebound in scale and performance; conversely,failure to tackle these challenges could result in gradual marginalization within the industry.The future trajectory of Pansong Asset's development remains a point of ongoing interest.