The recent departure of Deng Jiongpeng, managing director and head of fund-of-funds (FOF) at Orient Securities Asset Management—popularly known as Dongfanghong—marks the latest tremor in the slow-motion collapse of a Chinese financial titan. Once the standard-bearer for long-term value investing in a market notorious for speculation, Dongfanghong now finds its specialized FOF team reduced to just two managers. One of these survivors lacks a month of experience, while the other struggles with middling performance, leaving the firm’s 8-billion-yuan FOF portfolio effectively rudderless.
This personnel crisis is not an isolated event but the culmination of a decade-long 'blood loss' that has seen the firm’s spiritual and intellectual core hollowed out. The exodus began in 2016 with co-founder Wang Guobin and accelerated with the 2018 departure of Chen Guangming, the firm’s 'spiritual totem' who left to found Ruiyuan Fund Management. Since then, a steady stream of top-tier talent has migrated to boutique competitors, leaving Dongfanghong to grapple with a 'star-less' era that its internal platform has failed to sustain.
Financial consequences have been severe. The firm’s mixed-asset fund scale, which peaked at over 202 billion yuan in 2021, has plummeted to 88 billion yuan—a staggering contraction of more than 50% in just four years. This decline reflects more than just a bear market; it signals a fundamental decoupling between Dongfanghong’s rigid value-investing philosophy and a Chinese market that has shifted toward thematic volatility and passive strategies. Investors, once willing to pay a premium for the firm's active management, are now voting with their feet.
In a desperate bid for reinvention, Dongfanghong has recently pivoted toward the exchange-traded fund (ETF) market, filing for its first dividend-focused low-volatility ETF. However, this strategic shift comes late to an oversaturated market dominated by incumbents like China Asset Management and E Fund. For a firm built on the 'Zen-like' patience of active stock picking, the transition to the high-speed, low-margin world of passive indexing represents a cultural chasm that may be too wide to cross.