The Fall of China’s Hedge-Fund King


Xu Xiang was a legend in the country’s booming stock market — until the bubble he helped to create took him down with it.

At 10:33 a.m. on Sunday, Nov. 1 of last year, the highway police in Ningbo, an industrial city on China’s eastern coast, posted a seemingly innocuous message to their official microblog. “Due to sudden traffic control,” the message read, “all the entrances and exits of the G15 Expressway at Hangzhou Bay Bridge have been closed.”

That weekend, Xu Xiang, one of the wealthiest men in China, had been visiting Ningbo, his hometown, to attend his grandmother’s 100th birthday party. As the founder of Zexi Investment, one of China’s most successful hedge funds, Xu had consistently produced returns that were truly unbelievable: His worst-performing fund had grown by nearly 800 percent in five years. He had also survived countless corruption investigations, market falls, purges and other scares. Yet even as his legend grew, Xu remained intensely secretive. He had amassed a fortune by trading on knowledge and information no one else had, rumors no one else knew — a strategy perfectly crafted for China, where information is tightly controlled and reluctantly released. (Almost every source I approached for this article would only speak to me anonymously, fearing government reprisal or harm to their business.) Even as Xu grew richer and more powerful, he kept nearly every detail about his personal life and his trading techniques jealously hidden…

The Fall of China’s Hedge-Fund King

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