Dear friends,

 

Thank you for your interest in us. As the founder of Everest Growth Capital, I wish to introduce our passion and intentions of starting this new fund.

 

After years of experience in the asset management industry, I have found a very strong passion in pursuing long-term fundamental-driven investment, as many of my peers do. Yet, I have also witnessed a wide-spread scale-first mindset, index-following behavior, and short-term orientated tendency (esp. in China). Despite all the funds claiming that they put investors first and that they are long-term, the incentive structure often leads to the opposite. I believe the most important aspect of fiduciary responsibility is to fully align with investors’ best interests by generating long-term outperformance.

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The core reasons behind these problems, as David Swensen pointed out in his book Pioneering Portfolio Management, are interest misalignment and the incentive paradox of the asset management industry. In efforts of starting a journey to solve these problems is when I decided to launch Everest Growth Capital.

 

The idea of Everest Growth Capital began from an Everest Base Camp trekking I went on before my 30's birthday. In China, there is a quote from Confucius that At thirty, I stood firm ("三十而立"). To me, I believe that was the right time to change. By getting away from the everyday working environment, the inspirations gradually came to me. I have realized that with my experiences and passion, I could build a new model that works for both the managers and investors.

 

Everest Growth Capital has a unique design: First, management fee is budget-based rather than a fixed rate, and our management fee will decrease as AUM grows. This forces us to focus on generating returns for investors than growing our scale. We believe fund size must come as a natural result and must stay manageable. Second, performance fee is tied to long-term performance (we start with 3-year). This helps us to focus on long-term and removes the temptation for managers and investors to focus on monthly, quarterly or even annual results. Third, we are using a fixed hurdle rate (8% per annum) rather than a relative index benchmark. This helps us to adopt an index-agnostic approach and invest in opportunities which are not well represented in the benchmark and are often a very crucial source of alpha. 

 

In all, Everest Growth Capital is built upon a genuine desire to fairly reward investors who have placed their hard-earned capital in our trust. In the meantime, we are dedicated to creating a platform where our investment professionals could focus on generating the best ideas with long-term capital.

 

I am very excited to invite you to experience the difference of Everest Growth Capital.

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Best regards,

Min Zhou