CHRISTOPHER RUFFLE, CEO OF HEDGE FUND FIRM OPEN DOOR Capital Group in Shanghai, spends a lot of time traveling around China, trekking into the hinterlands and as far west as Xinjiang province, which borders Central Asia. His fund invests in small- and midcap Chinese companies, and if he and his portfolio managers don’t do their own research, they won’t be able to get reliable information. So they visit the companies’ factories and customers; they talk to people at competing companies who are, as Ruffle puts it, “willing to dish the dirt.” It is a total-immersion style of hedge fund investing that requires being on the ground and speaking the local language.
||(Illustrations by Christopher Serra) |
But for Ruffle, who is fluent in Mandarin and Japanese, the extra effort is well worth it. That’s because the world of smaller, thinly traded Chinese companies in...