Full Record 20,000 words!Li Keping the first time to decrypt the social security fund's investment genes

During the "two sessions" this year, the chairman of the National Social Security Fund Council Lou Jiwei said that in 2017, pension funds yield more than 9%。  Prior to between mid-2001 to 2016, the Social Security Fund annualized investment rate of return of 8.37% of total investment income 822.7 billion yuan。Since 2001, the Social Security Fund to 795.2.6 billion yuan financial allocations set sail in 2016, total social security fund managed assets of more than 2 trillion。  Leading this performance level of social security funds in the international counterparts, such as the famous Canadian pension funds (CB) 2006-2015 decade the average annual rate of return of 7.3%。  Compared to international peers, social security funds and investment ratio range of more stringent restrictions, mainly in the domestic stock market-based investment, of which equity-type investment ratio should not exceed four percent still。  Even more unusual is that in the A-share market ups and downs, the social security fund's performance excellent stability, investment operations 17 years, only in 2008 recorded a -6.79% of income, and then fell 65%。The remaining 16 years, the social security fund returns are positive。  As the oldest and largest upstream institutional investors, pension funds to continue to improve China's capital market has played a positive role in guiding institutional asset management fund industry, represented by establishing the right investment philosophy and regulate the development of more It is to play an irreplaceable role。  SSF's professional, standard and integrity of the public mind has been praised for the fund industry。Because it is an institution directly under the State Council, the Council's long-term compensation and financial institutions have a considerable gap, make excellent performance at very low pay levels, the Council has won the respect of industry term, it is recognized as "for the people most profitable institution "。  The Council's first investment director Li Keping also highly respected in the industry。Li Keping mid-1982, graduated from the Department of Economics, Peking University, Beijing after nearly a decade of Chemical Management Institute。Since he entered the State Commission for Restructuring the work, the macro-control system, Deputy Director, Director, Assistant Inspector, Deputy Director, Inspector。Since 2001 to 2007, Li Keping into the social security fund, as an investment director。In June 2007, he was promoted to Secretary-General Li Keping the National Social Security Fund Council。In November that year, he served as party members of the National Social Security Fund Council, vice chairman。In 2011, Li Keping transferred to the investment company, served as deputy general manager of CIC, vice chairman and general manager, and has served as chief investment officer in June 2016 retirement。Currently, he is still one of the 15 directors Social Security Fund Council Conference, and served as Distinguished Professor of Management Practice at Peking University Guanghua School of Management。  Claiming to be "the first soldier Social Security Council" Li Keping, participated in the preparation of the Social Security Board, the investment team single-handedly set up the Social Security Fund Council。He led his team, made a lot of pioneering work from scratch, establish a set of investment system of social security funds, and investment in 10 years of practice, gradually formed investment philosophy for the Chinese market, especially its leadership of asset Allocation team's original concept of the social security fund, even based on the excellent investment performance enriches the investment management of large institutional investors, has been widely praised。  In the fund industry was founded 20 years on the occasion, Li Keping accepted an exclusive interview with China Daily reporter's Fund。He was quite serious, for fear they will be modified or landscaping when memories of the past, he consulted early work notes。In the interview up to more than five hours, the Li Keping the first time to the media about the past 11 years he was in the Social Security Fund: organized from Social Security Council to set up only three years only 38 people, several officials led a gang of students build social security fund investment system; from beginning to lighten up around the year 2005, the Shanghai index 1000 points Opening, 5400 to 2007;; from the mysterious draft Social Security Council in Shangougou, to cast the transparent management of village from a share cultural industry fund shares to significant deficiencies; from investment value to configuration management……Li Keping about his actions, thoughts, no cover does not cover, honest, and does not boast cutting, professional rigor, there are plenty of wonderful story is the first time publicly, more of a deep understanding of China's capital market and investment management insights。  The following is an interview with Record。  Chairman Liu Zhongli's first pick "the first soldier" Basic Chinese newspaper reporter: In September 2000, the National Social Security Fund Council was established, give us a brief background of the establishment it?  Li Keping: In 2000, the central brewing establishment of the National Social Security Fund Council, the then Premier Zhu Rongji is the main promoter。  A basic background of the establishment of the National Social Security Fund Council, in 1997 launched a new round of SOE reform。Premier Zhu Rongji on the re-employment of laid-off workers, pension placement and other issues very seriously and put a very large effort to personally research。The smooth progress of the reform of state-owned enterprises need a better social security system to support, which will push the social security system improvement and reform to the fore; and China's unemployment, pension issue has become increasingly prominent, empty individual account, the future of aging of pressure, it is the main driver of the establishment of the social security fund; in addition, China as a multi-ethnic imbalance in regional development of country, countries need to respond to the needs strategic reserves under special circumstances。  Driven by multiple factors, and in September 2000 the Social Security Fund Council was formally established。  China Fund News reporter: It is said that you are the first soldiers of the Social Security Fund Council?  Li Keping: According to the central decision, Liu Zhongli, director of the National Economic Restructuring as NSSF's first president。In August 2000, he talked to me let me join the social security fund to be set up。  I was his subordinate, then deputy director of the Economic Restructuring Office of the State Secretary macro。Frankly, at first I did not want to go。I like work and more like the study of macro-economic policies and institutional reforms do stay at the macro Division。  Later, the leaders gave me revealed a message: 2001 Government agencies will be a great adjustment, will be incorporated into the State Planning Commission for Restructuring the Economy, Development and Reform Commission was established。The news made me change my mind。Do policy research at the Economic Restructuring Office, I like the work, but I do not like to feel that they are not suitable for administrative work。  So, I became the first Social Security Fund Council, one of the soldiers involved in the preparation。  I am the first to recognize Liu Zhongli, due to the tax reform in 1994, the Commission for Restructuring the macro Division played a more important role, I told Liu Zhongli, Xiang Huaicheng are recognized at that time。1998 by the Minister of Finance Liu Zhongli transferred to the State Economic Restructuring director, became our direct leadership, because a lot of work macroeconomic Division, I often need to report to him, communication, travel together, a lot of research time。  I am grateful for his confidence in me, and strive to live up to his trust。Fortunately, he did not hear me say sorry selected。  Founded three years, the management of all personnel 132.5 billion fund only 38 people China Daily reporter: Social Security Fund Council, as a public institution under the State Council, how in the early positioning?  Li Keping: The establishment of Social Security Fund Council, Premier Zhu Rongji and Liu Zhongli, chairman of consensus, should the Social Security Fund accomplishing a new type of institution, rather than the traditional government agencies。SSF has a very special starting point is to bureaucratic direction and orientation, development for quite some time that the council played an important role。  In 2000, when discussing the framework of the Council, decided to only set up four departments, the General Office, Ministry of Investment and regulations Ministry of Finance, after just three sectors covered by the investment of the former in the background。At that time, government agencies ubiquitous large administrative logistics, third, etc., we all do。  The Council also set up in the official vehicle not equipped, is a unit of all government departments and agencies directly under the State Council, the first pilot reform of the bus。The Council is very capable, very little administrative support staff, it is only necessary equipment, such as financial must be two people, a person must be confidential。For a long time, all administrative logistics such as equipment purchases, print data, confidential e-mail, office supplies, etc., all the chores by doing a person, that person is the Director。  In order to try to simplify the organization, was first established, the preparation of the Council of 50 individual。The Council was established three years to 2003, when Liu Zhongli retirement, all Council staff and only 38 people。  The end of 2000, the General Office of core staff in place in succession, Shen Xiaonan Ministry of Finance Accounting Division are also transferred to the Ministry of Finance is responsible for。In February 2001 the Governing Council gradually for the community recruitment, team building。  In 2001, the Social Security Fund is a pioneering years of passion。Had not yet established the administrative level, there is no definite chief, deputy chief and chief of everyone equality。  I am the director of investment regulations escrow portion, the Ministry of Investment and Regulatory Affairs entirely work together, work is also unified arrangement。  By the end of 2001, the two departments combined total of a dozen people, they have no title, very equal, flat management。I completely to the organization of work according to each person's talent and experience to fight so that everyone can maximize their own initiative。In case of major projects, to find an organization ability to take the lead, lead the people nor administrative duties。Project finished, the project team disbanded。  In a sense, I count a connection point。Big decisions, big direction is determined by the Chairman, Vice Chairman and other leaders。For these leaders, by their past experiences, from the number of people in terms of social security council this team is really too small, but they are responsible for。Since I'm one bearing on between the Council and the leadership of the investment and risk management team under, I joke that I like a foreman, we will send tasks, discuss, inspection results reported to the top。Of course, I will study together with you。  An official, led a gang of students did a great Chinese newspaper reporter fund: investment team then you are mainly graduates?  Li Keping: Yes, the vast majority of our team are all just graduated from graduate。It's not that we do not want the industry to recruit experienced, but more difficult。On the one hand, the Council is a new institution, we lack of understanding。On the other hand, compared to the securities industry, the staff council of the treatment is too low。Although at the time Premier Zhu Rongji suggested that the Council should make some arrangements in salary incentives to recruit high-quality personnel。We also made some efforts and attempts, but can not change the background of the Council is an institution directly under the State Council。  There are also some securities practitioners to candidates, after the interview, we feel that the investment philosophy or not, we need people who are not。At that time, China's capital market is very irregular, investment experience in the industry to get the A-share market, such as insider speculation, I feel strongly that the Council is not suitable, it is not a true ability to regulate investment operations。Finally, we only recruit the two securities practitioners, one of which is later served as director of investment Zhan Yu cited。He was already working in the industry over a decade, I chatted with him when recruiting his clear thinking, peace of mind, has operational experience, he was optimistic about the future development of pension administration, he later did the investment team also played a good role。  Our investment in this team almost all graduate students, there is no historical baggage, almost a piece of paper, you can draw a new blueprint。Their good qualities, learning ability, innovation ability and professionalism far exceeded my expectations, they are also very strong fighting。I feel very lucky。  Because this is a student soldiers, most are single, working late, they spread out newspaper on the desk, sleeping on a chair, not to go home。This is a normal。Huawei was to promote cultural mattress, a colleague in the families of Huawei, is not it also proposes the release of army bed in the office。  Throughout the preparation process, it demonstrated considerable hard work and selfless。The first year we work to average nearly midnight, we are fast average twelve come home, often two or three discussions to midnight。At that time, we spread a fun team。There are a married colleague, Mrs. middle of the night two more called and asked why he did not come home。He explained that, also in the conference room to discuss the document。His wife does not believe that how a middle of the night two or three bodies also meet?Other colleagues booing on the phone side。Later, the colleague had to let me answer the phone。I explained that indeed is in a meeting, not to sing in the karaoke OK。  In this operating state of the high-intensity, but also we need to maintain good mental and physical。We liked team sports, like football, badminton, sports on the quality is much higher than average, like risk management Luan Ping is a very good football striker。We desperately want to play to play, from morning to night to dry on a dry day and night。  Of particular note is that this is a different team and they have a good educational background, very confident, very persist, most people have quite a personality, not a class full of character。In discussing business, they each have strengths learning ability, have their own views, the debate was a lot of things are very intense, but does not affect everyone's cooperation, we are all equal。It makes me a limited staff, you can hear more differentiated views, very benefit。  I'm relatively speaking, be more willing eclectic, listen to, does not exclude differences of opinion, in my opinion, the different opinions but need to listen carefully, to figure out his logic, listen to understand, you can not agree, if you just because different, do not listen to, or view the conclusion is not like you do not listen, it's your loss。Because any kind of style, there will be limitations, everyone has limitations。  In those days, we all feel very memorable, although the poor condition of many of the industry poaching, we first decade of the staff is still stable。  China Fund News reporter: so hard, the treatment is not high, very stable Why team?  Li Keping: Looking back now, because it is the pioneering period, we are very passionate, very love this job, very dedicated, but also from each other and each other from school this big platform to things, we worked together very happy。  This is a good platform, there are many opportunities to learn, you can learn a lot。In a mature organization, you can only do one thing, and in the start-up of the Council, a person to do a lot of things, involving broad face, more training opportunities to enhance the speed depends on your ability to learn and work ability。  In 2001, we are basically in studying and learning, do the preparatory work for the establishment of institutional, investment principles and processes in mature institutions, such things are often experienced professionals to do。In our team, it is to do what the graduates just to work。Many are business rules they set, they learn through relatively later believe in something, they will naturally do it in accordance with these rules。As another example, the early establishment of a large number of laws and regulations and regulatory rules require government departments and communication, which allow them to have first-hand experience of the development of the relevant government regulations。If a mature organization, you can not go through this process。The team started with a blank slate, from zero to one, this experience, and experience is difficult to reproduce。  Moreover, we also sincerely recognized, management of social security funds is to give people across the country to work, to the National People's money, this is an important spiritual motivation。Although he took less money, but my heart will feel balanced, calm some of the。So, despite the low wages, sometimes opinions also great, but we still insist on for many years。  Now, think back to the success of the Council also have various coincidental。This process can not be copied from the perspective of system。If now and then the establishment of a social security fund, in this way it is difficult to do it。It is difficult to recruit people, now too strong flow of talent。  I was able to participate in the initial stage of China's capital market development of the social security fund, through the efforts of the team, the social security fund on behalf of institutional investors to become established template paradigm in the field of investment institutions, for me, is very lucky。  Although a lot of investment, but also tiring, but it does also enjoy the process, because the Council and the entire team together, very committed and very dedicated work, is very happy。Not one person I have the feeling that the team most people are quite fond memories of the time。  China Fund News Reporter: What do you mainly work early?  Li Keping: sources of funding Social Security Fund is divided into three parts: state funding, state-owned shares, lottery revenue by the end of 2000 the State Council issued regulations on state-owned shares。  Early on, we are mainly and relevant government departments to communicate some of the issues of principle, including how to locate the Social Security Fund Council, how to carry out the development work, funding of social security funds and the corresponding regulations, etc.。  A very important task is to implement the "National Social Security Fund Investment Management Interim Measures", focused on how the social security fund, investment management how constraints?These require clear, detailed specifications and guidelines。Such as stock investment trust management requirements, it is necessary to choose a professional investment management organization to manage the pension funds, which involves investment managers need to have the qualifications and requirements and how to choose and so on。  At the same time, we also communicate with the relevant authorities on how to implement the social security fund compliance work in accordance with the law。Social Security Fund is the first large institutional investors, in cooperation with the relevant professional bodies, from setting up an account to entrust management, custody business, liquidation, etc. Specific business operations, involving the understanding of the securities, funds and other related laws and regulations specific provisions the need to define the relevant departments。For example, the Social Security Foundation commissioned a number of agencies, the legal relationship between multiple accounts with a final manager, how to comply with the "Securities Act" securities investment accounts。We spent a lot of time and effort with the Commission, exchanges, clearing organizations to communicate。We require standardized and transparent, where the law, what rules is the need to clear in order to work in legal compliance。  In addition, we also began to study the pension system, learning the trends and changes in international understanding, we go to Hong Kong to study the MPF and Tracker Fund, understand the relevant issues, including the relationship between the fund and the sale of public revenue。  China Fund News Reporter: So you are an officer, led a gang of students, established a framework for the investment of social security funds and the various regulations。  Li Keping: Officials say I can, I do not want to treat me as officials, first I do not like the standard of official style, but also because the second I entered the institutional research and institutional reforms in macroeconomic policy like, I prefer to Research suggestions。  In 2001, our investment team's core work is to learn from the industry's international investment management experience especially pensions, to establish their own investment management, learning-by-doing。  International agencies have mature pension investment management experience, there are more than a few decades mode of operation of the pension in the international market。China's rapid economic growth superimposed huge population, a huge number for future management of the pension fund, they have a great interest in involvement in the market as soon as possible。Therefore, foreign asset managers are very concerned about China's Social Security Fund Council has just set up, which allows us to learn from them more convenient。  At the time, the Social Security Fund can not invest in overseas markets, but many forward-thinking institutions, do not care about short-term gains and losses, showed considerable patience and passion, through face to face, to provide materials, training and short-answer questions, provide us with some of the original template and pension investment management business-related experience, including processes, product design, risk management, asset allocation, which form our understanding of the earliest in this area specific practices and models。  Our lectures during the day, in the evening to discuss and organize material, digest content。Learn from and build almost the same time, this is a process of flowing water, learn something new together to complement, especially when we see there are some differences between the different institutions of the time, repeatedly discussed how to understand。  Six months later, we are starting to converge, to organize and establish a centralized framework for investment management operation Council。In September 2001 the formation of the initial blueprint for social security management framework for the operation of the Fund Council investment, including configuration, build a combination of external investment manager, custodian and risk management systems, etc., as well as, how to assess managers?The questionnaire for managers and other work basically formed。  In establishing the overall investment framework, the Council leadership team are trusted only put forward four requirements: a high starting point, high standards, international practices, standardization, specific things very little canal。Leadership Council is very forward-looking, not made according to the current mode of operation of the market to design social security fund, to learn from international experience, standardized operation。This determines the direction and standards, the entire investment team is trying to do in this direction。  The industry quite strongly that the social security fund questionnaire too westernized Chinese newspaper reporter: What deeply impressed foreign institutions?  Li Keping: foreign institutions in general are very friendly, and they sincerely hope that through exchanges, enhance mutual understanding and establish long-term cooperative relationship。At that time helped us a larger bank proper way rich, California Public Employees' Retirement Fund (pension fund), Schroders, Invesco, and later was acquired by JP Morgan Fleming, etc.。  Fleming has extensive experience in Taiwan。Experience Taiwan closer to us, a good understanding easy reference。Taiwan has provided us with the manager questionnaire and other information are Chinese vertical layout, I still remember very clearly。Taiwan experienced a lot of lessons from the domestic secondary market was very irregular, securities institutions in Taiwan there are many problems。Fleming gave us the four major funds in Taiwan, including retirement pensions ask。Because at that time Taiwan and the mainland as well as restrictions on contact with the back of our Pension Fund unlisted contact her "chief architect" give us lessons in retreat Pension Fund of investment projects, including the bailout of problem, how to choose managers etc.。  Seriousness of foreign institutions exceeded our expectations。For example, we gave them a lot of problems list, I hope they come to us to provide materials or lectures。They use a lot of data and argument, we answer every question, and bound into fine file, then pile back over, so we are very impressed。  Impressive as well as capital, "LT" is to write the group's capital, Wellington is also good, this is the two have a long history and strong fundamentals of the asset management company。Introduction of the contents of their depth。The company later also changing, some of the reason is very worth exploring。  China Fund News reporter: with the domestic institutions of communication happens then?  Li Keping: help domestic institutions to provide more specific。For example, the social security fund investment product design is more in line with how the characteristics of the domestic market, the industry gave us a lot of inspiration and help, let us better understand what is possible and what is impossible operation。  For example, the Trustee or Trustees invest in stocks, how much should position?Now it seems this problem is very simple, but it was a great debate, we spent a particularly long time to discuss domestic agencies generally agreed that the position should be 0-100%, but almost all of their foreign counterparts are close to full warehouse, then in China in the end How to do it?  There is a fundamental problem for large institutions such as pension, if the positions of all equity products allow 0-100%, means that the configuration chaos。  Because when the delegate is configured according to the stock, the stock exposure, if the combination is five percent bonds into five shares, it is not a stock exposure。If all the stock products have to take more debt means that the social security fund shares overall configuration is very low, it is likely Ta。  Further, if the portfolio managers are free to adjust positions, it means that the Council give up configuration, it is not configured in the concept。The upstream institutional investors such as social security funds, the configuration is critical to the long-term trend and grasp the characteristics of various types of assets, long-term layout, rather than follow the short-term market volatility to adjust positions。  What is there reference?How much tracking error set?These problems, we also after repeated discussions。We give a reference, not only to measure performance, but also the investment benchmark, there may deviate, but not too much。  Because portfolio managers will often have their own preferences or characteristics may be more focus on holding your preferred industry。Individual investors, institutional investors consider the issue upstream of the underlying fund managers are not the same, standing on the perspective of pure combination, of course, can be concentrated, such as Buffett invests only in companies they are familiar with, but this model is not suitable for pension funds, must not be confused our position and needs。  Because the cycle characteristics of each industry is different, if the managers to invest in entirely according to their own preferences, there will not be to control the randomness and randomness is upstream of the social security institutions most unwanted, large organizations need a clear the configuration of ideas and direction, based on full research and falsifiable basis, in order to later work, the more effective evaluation of managers to do right or wrong and make improvements。By the way know how right, wrong to know what is wrong, so constantly revised, the probability of winning in the long run will be larger。This commission will be higher requirements for managers, fund managers need to be more mature, more comprehensive coverage of the industry, but also the need for better investment research and in conjunction with a strong research team。  Research and understanding of these issues, we will be reflected in the survey of investment managers in。  China Fund News Reporter: survey of investment managers include what?  Li Keping: We are in the process of studying and learning, and gradually formed a pair of public fund industry is relatively large impact on the investment manager of the questionnaire, which is our industry's interaction with a very important tool and carrier。  The survey concentrated on the views of the investment manager of the Social Security Council, requirements and need to have the conditions, including how to observe, understand, perspective methods and content manager。  Exchanges with foreign agencies is a major source of this questionnaire。  A large number of foreign pension institutions will have to entrust the management of the questionnaire, we first simply collect a lot of questionnaires foreign institutions reached a long questionnaire giant by merging similar items, and then one by one to discuss the first draft of compression more than a hundred questions, more comprehensive, but a bit long。We end up using the questionnaire in one hundred question about。  In the process of the formation of the questionnaire discussion, we considered how more suitable for the Chinese market, with the domestic institutions have also been relatively effective communication, we learned that domestic institutions are probably in what situation, what they value most is that they think What is invalid, this feedback is important to us, so that our knowledge of the market greatly enhanced, but also makes the questionnaire in the revision process more in line with China's actual market。  At that time, the industry quite strongly that social security questionnaire too westernized, copy foreign things a little more, and the Chinese market is too far out。  At this point, we do not have to absorb all of the industry's recommendations。  In my opinion, this is a problematic concept。  At that time the A-share market, insider trading, Zhuanggu speculation is serious, the prevalence of short-term speculation。We can not deny the objective reality, whether we should fully conform to the status of A-share market, short-term speculation with practical idea to establish our investment ideas, or should maverick, standardized operation?This is an option。  We insist, we believe that with the right ideas and ways to do things, and would rather not be understood, but also standardized operation。  In Huairou Shangougou first draft social security fund China Daily reporter: In 2002, the Social Security Fund Council first draft。At that time the jury was composed of how?  Li Keping: Early social security fund's investment scope is very limited, the provisions of the Social Security Fund may invest in bonds and stocks, "the Social Security Fund Investment Management Interim Measures" in the。Bonds can be funded by social security funds own the stock you need to commission a professional organization for investment。  In October 2002, we started the first selection of managers。As the "Social Security Fund Investment Management Interim Measures" There are various eligibility requirements for managers, so only the "old ten" election。Other types of investment institutions and the establishment of the short life of the fund are not eligible for election。  According to "Social Security Fund Investment Management Interim Measures", the social security fund to set up an expert committee to review hiring managers。  Its inception, the Council has repeatedly stressed the role of leading experts, from the end of 2000, we started looking for a job outside experts。  The first Council of Experts is China Securities Regulatory Commission as a consultant Neoh。In 2000, I accompanied chairman Liu Zhongli and Neoh meeting, he recommended to us Professor Professor Cheng Bing Song Fengming financial engineering at Tsinghua University and the Chinese Academy of Sciences system。  Cheng Bing was responsible for risk management at the Bank of England, the Academy of Sciences of the financial engineering doctoral tutor。Our investment risk management and performance evaluation system, he is the first to do together with doctoral students。In 2001, we spent a lot of time with them to develop this system together, participate in discussions with the management of investment risk associated with each formula, it is a valuable learning process。His disciples have become two of our team members。  We have established a committee member jury of experts pool for confidentiality, nine experts elected by drawing lots as a social security fund for the first time the jury draft, such randomness is particularly strong, it is difficult to guess。  Jury members are divided into internal and external members, the internal committee is an internal staff of the Council, accounting for less than one-half, external committee members and industry members including department, department members from the Ministry of Finance and the Department who both regulatory department。The Commission should not be directly involved in, usually invite the participation of researchers, as well as the Shanghai Stock Exchange, the Shenzhen Stock Exchange and industry experts, the Commission was doing the waves of the study, conducted in France in asset management Lin Yixiang an expert jury in the most time collaboration long, to participate in the highest number of experts, including lawyers also have a practical background in finance, like Wang Li DeHeng。There are many other people, gave great support and help Council。  The expert committee later in the selection process manager, gave us a very big help, their understanding of the Chinese market is more profound, more familiar with the situation of the industry, we have learned a lot in them。  China Fund News Reporter: What is the basis for the judges review?  Li Keping: expert review panel to assess candidates based on answers to the "questionnaire" and their market behavior and performance。  Survey commissioned by our investment in the energy spent most of the text represents the understanding of the basic framework of the investment trust, the impact on fund companies to participate in the competition is also a great。  Content is very extensive questionnaire, to understand the core content, it is simply include investment philosophy, team, process, performance, products and other so-called 5P。But in fact far more than 5P, our problem is equivalent to the entire fund company should break up, then combined, investment, risk, internal control and background, we will raise a lot of questions。  For example, the first layer is a corporate governance issue, is to invest in further decision-making mechanism。We want to know exactly what the company's investment decision-making mechanism, a portfolio manager with investment committee how decentralization, how authorization。Investment decision-making of the investment committee, is in charge finalized or voted?Voting is an absolute majority or relative majority?Who has the right of veto?What authority delegated to the portfolio managers?How he used these powers?How the company can stop him?Our problem has been tracked lowest level, until no longer points。  We want to know the company in the end is what kind of works。Many companies themselves difficult to define these issues, but we are brought up, they must rethink, make their own choices。  Such as risk, how to define risk, how to manage risk, what indicators are, how to determine how to evaluate risk appears, pursued; what criteria buy stocks, sell stocks what conditions, stock pool to establish standards, how to combine investment research, are separate or one of the study to what extent, what incentive is that the leadership of the company and the fund managers are how much weight must be accurate to say it, you can not say no。It can be seen that the existence of differences among companies。  Objectively speaking, when many fund companies still rule system is flawed。  We can see in the election materials, many companies have rules on internal systems "to develop or revise the questionnaire" one-third received。Many materials are reviewed each fund public offer, and finally we send to each member of the expert review data ahead of a large suitcase review。  Why Social Security hiring managers can play a positive role in the public fund industry?  Because the operation of the social security fund in line with market direction, and the questionnaire is a framework for our selection of managers, and standard text of the blueprint, all the candidates know what the company requires pension funds, this will inevitably lead to a more profound reflection industry。  Interaction Social Security Fund Council and the fund industry, the driving force is the basic assessment of the Council specifically how to fund companies, how can we expect, what endorses opposition, including how to assess at a later entrusted investment operation, all of the investment fund company operations had a profound impact。  China Fund News reporter: the impact on public fund social security draft is how it happened?  Li Keping: People are particularly vulnerable understood as a force for power or big money。In my opinion, the key question is what tools and conduction mechanisms play a role in the big money is。For example, how the selection of managers is an important way。  Review Committee on the management of candidates said and done one by one comparative research, data for presentation materials and fund managers own comparison, it is easy for the truth。Participate live defense fund managers, including many of the best funds are tight, if the written material is not real, it is easy to be exposed, and the Committee of Experts on the lie would not be forgiving。  Such as investment philosophy is very key concept, but it is also very difficult to accurately locate and capture the concept of。Managers pursue and believe in is what kind of investment philosophy, how to get the perspective of his investment philosophy, which is very specific and complex matter。Each company can write a few nice slogan, but we do not focus on how you said that if you believe, please tell me how you do。  Waves have a very classic argument, like a product, you can not just listen to the workers say how he produced, at least you climbed up to the window to see the workshop, it is best to stand sideways to see if he was specifically how do。  Investment philosophy have matching process, there must be the core concepts, core logic, core processes to ensure the implementation of your investment philosophy。We want to see your position, look at past historical data, how do you explain when heavily loaded basis, according to what to buy based on what is selling, how to think, the most extreme is to come up with the basis of the decision was to provide the original record。There is no racking our brains for investment decisions of companies?Have。We have not done very carefully?There。  Also, very important is the ability to find investment managers, to eliminate ingredients luck。In fact, a lot of good investment performance is brought about by luck, if it is the ability to create a real investment, there will be trace to be found。How you explain how the excess return is obtained, to come buy, hold, withdraw some of the aspects of such data and in accordance with, this time he is how to think is how to do, it is not immediately possible to agree。For example, we all love that adhere to long-term investment value investing, but you manage the portfolio in the past three to four times a year turnover, it is clearly not on the。  By comparison philosophy and practice, you will distinguish good managers and insincere manager。  China Fund News Reporter: What is your evaluation of managers value most?  Li Keping: really good manager is the first honest。  There are a lot of managers do not understand this truth, always thought is expressed well in defense advantage。Wrong, honesty is the biggest advantage。Honesty is the cornerstone of the company's integrity。  There are some people in the industry in the past asked me, what skills social security draft reply, my answer is simple: careful preparation and honest expression。  In my experience of managers in hiring, I think the courage to say I do not know the manager, rather than actually scoring less points。  We will ask the respondent fund companies a lot of problems, sometimes, fund managers will answer I do not know or I have not thought through, this time, you will find that led general manager or deputy general there will be more surprised。Good fund managers are generally not particularly tame, he would not directly answer NO, I do not understand……Such a fund manager, what we see is honest, know what to say, I do not know just do not know that he is in fact sustained questioning, he also has his own views, but never self-deception。You need to look for is the portfolio manager is not an actor, you have to trust him, with his professional competence, honesty is the most important prerequisite。  The selection process there is a misunderstanding, it felt like college students debate, put it pretty high score。Language skills are not listening to us, but the portfolio manager's investment ability, even if this person is stuttering, hear the pain a little, but if you really talk very reasonable, stuttering does not matter, but his performance is not going to stammer。  China Fund News reporter: the first draft, what are you most impressed?  Li Keping: Leadership Council requirements for selection are: fair and equitable and specialization。In the current market environment, this kind of competition in order to ensure the fairness of justice, is not an easy task。  In order to ensure a more rigorous selection, Deputy Secretary General of the Council Liu Changlin went to the scene where the respondent, we have seen together, only one standard, you can not take the phone, the selection process in order to avoid information leakage。So, we are running around Beijing Shangougou no wireless signal, and finally chose a side of Huairou Mountain Training Center。  Leading SSF very strict requirements must play a role in the occurrence of the Committee of Experts, respect the views of the Committee of Experts。  2002 December 20, the last day of the draft social security。At the end of the interview, members of the independent expert scoring, can not talk, scorer took the computer on the spot input, excluding the highest and lowest scores, arithmetic average, natural order, on the spot results。The results submitted to the Board for approval Investment Committee, Investment Committee and there is no particular reason not change the assessment based on the results of the Committee of Experts。The whole process is very transparent and rigorous。  After the review, the afternoon when I asked the chairman to Liu Zhongli officially disclosed the results of the assessment, then he briefly mentioned some weighty greeting, then said: "it published as soon as possible."。  So, we immediately publicly disclose the official selection results。  I chaired the Social Security draft concrete work。Throughout the process, passing leadership of the Council did not give me any pressure, not even indirect pressure。Until the final selection is over, only then he was chairman of pressure revealed to me。  At that time, I was very moved。That's when I realized, is the authority of the Board to withstand tremendous pressure to ensure that the expert committee of independent professional selection。If there is no independence and impartiality, professionalism will be no place。If the director told me in advance, I will be very difficult, I think I will stick by the program to do, but too much pressure, the mood will be very heavy。  We become chairman of the umbrella, he has done great。His public mind and courage set an example for the team。  Social Security is almost pure equity portfolio in the top 25 percent of China fund newspaper reporter: June 6, 2003, the Social Security Fund Council commissioned the company raised funds of twelve products?Put into operation, what was important and difficult is?  Li Keping: In philosophy, we advocate the value of investments, long-term investments, responsible investment, objectively speaking, the understanding of this slogan was not very full, our understanding of the investment philosophy is a deepening perception of the experience process。  For a large institutional investors, value investing and usually a single combination of value investing style is not a concept, we want to reduce speculative arbitrage, avoid short-term speculation, more concerned about the long-term value basis, based on corporate fundamentals are more concerned about profits and performance changes, more attention to changes in value of the company。  Chinese people are very smart, the market there are too many tricks of cleverness, but once the short-term goal, it will be a very intense speculation, short-term speculation a big threat to large organizations。Large organizations need a little Taizhiruoyu state, short-term cleverness can not be too got the idea, some short-term opportunities, even if you are a judge, but because large organizations turned slowly, nor is it a good way to profit。For large organizations, there are some basic methods, basic rules and common sense can not be offset, if cart before the horse, to stroke the most eye-catching of the most beautiful story, finally may outweigh the benefits。  Different types of institutions, investment philosophy and approach is different, some fund managers prefer a more aggressive risk taking, to use their experience and skills to catch some short-term opportunities, this is his style。However, large organizations must not go that way, the size of those opportunities do not support large-scale investment institutions。  Therefore, we must first know yourself, your management features to determine the nature of the funds, and to find the appropriate investment method with road。In addition, you must consider commissioning period, risk preferences, determine a reasonable return on investment benchmarks and targets, these articles are not written, is to be implemented by the commission contract, if there is an unrealized loss on redemption of investment fund managers also how to do。These preconditions compacted, it's easy to manage people portfolio。  In the A-share market, many investors trust that he is twisted, and he told you long-term investment, the results are all short-term speculative behavior requirements。This will make a very painful manager。  The first term of entrusted management contract, we discussed for a long time。Eventually, the first deadline set in the contract for two years, and then it changed to three years。  In the long-term investment, the investment horizon is a very important part, has two meanings: First, if there are no special circumstances such as serious violations, within the term of the contract, not because of some short-term fluctuations in performance hasty replacement of managers, of course, also choose managers put forward higher requirements; the second is to the manager sends a clear signal, according to a given investment period to consider investment strategy, not short-term。Because of the obvious short-term, or even been to a quarter of the monthly ranking ranking, a lot of pressure fund managers, fund managers also bring a systematic acts of convergence, because the best way to not fall behind in the rankings, it is first of all not to leave the big teams, Secondly, when there is certainty about the copy shortcut。Short-term relative rankings of competition caused by the convergence of operations and funds hold together for warmth, fund managers and investment is difficult to study heart sank。  Therefore, the social security fund managers want to show that on the investment horizon and evaluation, will respect the contract, which insists on two or three-year period, there will not be a fluctuation on the withdrawal, otherwise, the portfolio manager is still not the end, he could not be to trust, it will adversely affect investment。  In addition, according to the situation a share of the market, we give some portfolio managers adjust the position of the right, should remain at least 60% -80% of the positions, but not significantly adjusted, which involves the issue of the social security fund allocation, configuration is the core upstream organization, we must adhere to, can not give up。  China Fund News reporter: how to track management council and how to evaluate the operation manager's?  Also communicate when delegating portfolio, requiring managers each quarter has officially commissioned report, there are hot issues of mutual communication each month, there are significant changes in the position to carry out telephone or face to face discussion, keep: Li Keping assessment is continuous and master the combination of。  It is also a question of degree, we should always keep an eye, but can not interfere with the fund manager's investment decisions。In this regard, we have been groping。  We emphasize that can verify any issues of concern, but fund managers are not allowed to give instructions or suggest what to buy what to sell, it is very clear requirements。  If you find after some special phenomena, such as particularly heavily loaded, and so on to buy or sell soon。When the unconventional operations occur, we ask for the manager is, do not change your behavior and thoughts, but you need to understand the reasons for, and a claim based on a number of Certificate。  Our concern is that risk because of the higher risks associated anomalies and, of course, this does not mean necessarily right or wrong.。Some fund managers have personality operations will have different places when finding abnormal, we will check the information asked in addition to first-hand, how do you say how to do, according to early enough, this combination managers also good, if your client has the ability and concern, the company also makes a more independent portfolio managers, they are not susceptible to interference, which is effective measures to prevent a risk of。  We require a portfolio manager can not be racking our brains work, requiring reason and logic, you must be convinced that the concept of。Portfolio managers can not adrift, can not always be carried away by the hot market。  We asked portfolio managers and investment philosophy consistent behavior, violation of consistency, good performance does not mean that ability, because this is your speculation results。The speculation is likely to succeed also fail, we are willing to bear the loss of consistency is the direction we have set, and you do not want to bear the loss of gambling, which requires fund managers are very rational, he was always ready to answer our questions: Why are we doing?Or why not do it?  At first, the confidentiality requirements of the Social Security Fund Trust Investment very strict, social security, portfolio manager can only do the unsung heroes。Unlike public fund managers, fame and fortune can do a good job。Assume greater responsibility for social security portfolio managers, the tube is not good, the combination has been canceled, the credit impact on the company too big。  Later, we established a system of exchange of social security portfolio manager, internal communications manager of social security organizations every year, have focused discussions and speeches, which also allows horizontal communication among portfolio managers, also have a chance to show。  China Fund News Reporter: I heard that you manage the relationship between the Board of Investment and the Trustee or Trustees are also very strict?  Li Keping: Our internal investment department of the Council is very strict。We initially clear that the Ministry of Investment colleagues to fund research and fund companies can not eat with people。Through the system, we trust relationship managers with transparency, simplification, but also more equality。  The nature of the social security fund of funds, risk tolerance is very clear, very clear requirements, we will be in accordance with the relevant requirements of the contract myself, authorities hope to be able to do it in accordance with the requirements of the contract。As long as doing investment management, do not need to go public。  Most fundamentally, the social security fund and put a lot of things related to the interests of fund managers all institutionalized, quarterly reports, there are assessment, combined with no risk of data there are no irregularities, the final performance, risk-adjusted returns They are objective data。As long as up to standard, no major irregularities, performance and very good, I assure you, yourselves will not go away, but you do not come easy to find who can put。If you are in the top three, we will be additional funding。Fund company executives do not have to visit, to draw funds passed。  Although the social security portfolio performance is not necessarily open society, but the administrator can still see each other's performance, competition is how well performance。As compliance issues, significant abnormal behavior, as well as help us staring at the Commission。  We focus on improving the ability to invest, they are happy we are happy。In fact, the final results, but also exceeded our expectations。  China Fund News Reporter: In 2005, 103 social security portfolio management to be eliminated last one。In 2006, the social security portfolio performance ranked bottom of management, to understand that you support a team of portfolio managers at the time, why is there a completely different approach?  Li Keping: 2005 bottom out just a test, the Board wishes to market a signal, the evaluation of the Social Security Fund managers are very serious, we must do a carry out there, can not become the iron rice bowl, to rigorous evaluation, assessment external managers, is to take the bottom out。  June 6, 2005, the social security fund management contracts expire the first time, after several performance difference is very small, developed from our goal, from investment performance, risk assessment, we do not think anyone should be eliminated, but from a global point of view, is more important to this signal。Later, no longer uses the bottom out, because the longer the time, the social security net equity products (1 prefix combinations) at full capacity in all fields comparable to similar products, almost all the top 25%, and then take the bottom out no sense。  Boshi Fund is a more typical case, Bo, when Social Security was relatively young portfolio managers, unlike other famous old star fund manager qualifications, their faith in the value of the investment, consider some of the president of the investment cycle, our team had to communicate with them early and understand that although they are young, but very personal and ideas。When the 2006 performance year after year is not very good, they had to discuss with our team positions, more agreeable, like their idea。  At that time, a lot of pressure Boshi Fund advice on whether we need to rethink the views of candidates, or strengthen。Our team just communicated on the matter, and my heart is also more bottom。I'll just say that we agree with their investment philosophy, they chose the stock is very solid, and can withstand scrutiny, can give a longer period。  Later, their performance is very good, to be a young group of pension fund managers in the crowd。Large organizations need managers should be the core of this type them。  Social Security in the early development of the fund industry with interactive, very beneficial for both sides。Social Security is also very lucky, in the 2001 after a considerable period of time, the Chinese capital market investors such as the upper reaches of the NII small, the relative lack of big money, we have a unique advantage, to have adequate communication with the fund industry and Cooperation。  In the early days, fund companies to social security, whether it is from the perspective of the national pension reserve fund is still an important customer perspective and concerns very seriously, so we can fund manager and some excellent cooperation。  Below the thousand points, Opening?Opening!  China Fund News Reporter: social security portfolio managers have lamented, the Social Security Fund Council is the "god operation", the left side of the reverse operation is very successful。In 2005 the stock market is extremely low, in the vicinity of 1000 points you increase the stock configuration, you can talk about the situation?  Li Keping: In 2005, the Social Security Fund has selected a second batch of managers, stock managers have twelve。From the construction of the product, it has the ability to be more large-scale operations in the stock market。In addition, after the establishment of the social security fund growth year after year, from the size of funds, product architecture and design, they are equipped with larger capacity management, configuration there is still much room for equity, in the long run, higher stock returns。  But these are not the decisive factor。  Our decision to solve the core problem is that the stock market is facing short-term impact, or the capital market crisis?That capital market will not collapse?  Our basic conclusion is: no。  Because the Chinese economy as a whole more normal state, there is no big risk factor; tradable capital market is brewing, the direction of reform is to the good, and that gave us confidence。  The next question is whether we should scale their portfolios when Jiancang?  Our team of investment and risk management teams working together from day one。Faced with these major issues, the two departments to discuss, because we consider the angle is not the same, there are different points of view, it can be relatively complete information, to make a more accurate judgment of the market。  Judgments of value is based on our core, no matter what specific tools and methods, the whole market is indeed in a serious underestimation of the state, there is no disagreement on this point。But some worry will be lower, we do not know will not lower, when it will be strengthened by the low。  I believe that the average return of the stock market crash unless otherwise stock market is certainly up and down fluctuations, the final will be back when the mean seriously undervalued, overvalued will come back, we do not know is that the so-called inflection point, but I do not think the turning point It can be captured, not looking for the inflection point does not mean you do not act。  Overall, our entire investment team at the time of the analysis and understanding of the laws of the market is still in a preliminary stage, more long-term asset allocation is based on the concept of a single operation。  China Fund News Reporter: At that time, the stock market is in the doldrums, panic filled, the Shanghai index breakdown was 1,000 points, 500 points was seen even the stock market crash to say, the social security fund to publish annual reports each year, under the supervision of the National People's , it was proposed Opening pressure?  Li Keping: We certainly there is pressure, but there is no pressure from superiors。State Department and the pressure regulators to the Council is not great。  The Council was first established, there are 14 directors。Premier Zhu Rongji as required, trustees are old leadership Finance fronts, such as Yuan Baohua, Li Gui fresh, Chen Jinhua, Jing Shuping and other old comrades, they are respected, regard the social security funds as the relationship between the vital interests of the people of important business, very concerned, also very supportive。Like Yuan Baohua almost ninety years old and you still insist on participating in the General Assembly Council。They are also very open-minded, visionary, it requires us to invest, to focus on the long term, not short-term behavior。  The Council has given us a very relaxed environment。Liu Zhongli, chairman of the social security fund in the previous management positions, work is very meticulous。Social Security Council, he mainly to the general direction of very specific work to let go。Xiang Huaicheng, chairman also took a very liberal, very bold decision。  The Council attaches great importance to the leadership team of the proposed investment in the investment decision-making, he gave the team a great investment trust。Of course, the greater the confidence in our leadership, the greater the pressure on us, did not slack。Leadership Council is very open-minded, very good team is also very hard, so I was very lucky。  China Fund News Reporter: Board Investment Committee later how to make decisions gallon?  Li Keping: Board Investment Committee by the department director and all the leadership council composed of。Opening on things, investment committee had numerous meetings, very very intense controversy。  On the investment committee, questioned the two main points: first, the market will fall further, my answer is I do not know; second, the situation of the market downturn will continue for how long, I still do not know the answer。We can only say that we know what is。  It's easy to think that this time Opening too risky, this is a misunderstanding。  Judgment on the risks of the market downturn, is a very complex and delicate question, when the market fell below the thousand points, the market risk is large or small, can not be answered in one sentence。The answer is not YES or NO, because look what terms。  As an index for the overall market, if that will not collapse, this time the market risk has been greatly release, the risk is very small, therefore, contrarian, value investors should approach。  From another perspective, this time risks may be large, there may be something in the original mortgage business valuation is high, this time become worthless, to add cash or collateral requirements, this market extreme stress may lead to a series of chain reaction of uncertainty will lead to some specific investments appear that you can not imagine the enormous risks, the possibility of bankruptcy occurring at this time is relatively large。  Investment team views very clear, is Opening。The main difference is in the policy choice is to add all at once, or three or six months average gallon。  Investment Committee for Risk worry more, and finally, Xiang Huaicheng, chairman of the final decision gallon, won the support of the investment committee。In the final decision, chairman bear a great responsibility, we have done a very correct judgment。  We started Step by Step Opening, on this very objective of panic in the market has played a stabilizing role。There were thousands of points of concern Battle, regulatory authorities and the government has repeatedly shown that hope that we buy, it is no secret at all, there is no inside information, this is the right way to invest。  This is a victory for our team。Council decision-making procedures are very strict, if no team cooperation and support, it is impossible to make such a major decision。Opening of the funds and not that much, but this is an important seed, 1000 seeds, laid the foundation for future high-yield。  More importantly, this is a successful operation, so that the social security fund more profound understanding of the configuration, also began to re-understanding of international experience。  Foreign pension institutions have advocated a long-term strategic allocation, we practice in the management of social security funds, the characteristics of the Chinese market began to give more consideration: First, China is an emerging capital market, unlike developed countries, the rate was significantly higher stock market volatility; second, second, non-economic factors trigger more Chinese stock market volatility; third, China is an emerging market, if strictly in accordance with the long-term strategic allocation, not dynamically adjusted, not suitable for China。  This asset allocation and rebalancing of discipline have similar place, different starting points, the same thing。  In the stock market a positive start to lighten up China Fund News Reporter: In 2007, in an optimistic mood in the stock market, but you will begin to lighten up, and why?  Li Keping: In 2007, I was transferred to the Secretary-General of the Council, the vice chairman, was mainly in the Party School。Liu Changlin was the investment director, working in the front line。  The first half of 2007, the market is skyrocketing。Liu Changlin and investment team have more clear understanding of market risk, "May Day" before and after, Liu Changlin told I have discussed lighten up。  With the market getting crazy, voices and even 8000 points 10000 points are high, our investment team to each and concluded that the bullish basically there is no solid basis for truth, is a kind of mood。  At that time the market price-earnings ratio is already high, this very overvalued state for how long, and when mean reversion began to appear?Of course, someone will say, the final phase of the bull market high income, do not give up, but the Council is the pension manager is prudent long-term investors, not the pursuit of the income is too high to risk Bo, can not be so greedy, can not pursue buy sold to the highest point to the lowest point, in fact, no one can predict in advance the so-called highest and lowest point。We took only a relatively large benefits to grasp, this is our basic consensus。  The Council approved the investment committee report holdings of the investment team, when the Shanghai index has reached 5400 points。  Investment team developed a clear reduction program, under the single pumping funds back weekly until holdings to October, before the congress was held, we think we should stop for a while, when the Shanghai index at 6000 points, we are also worried reduction will lead the market down, a week after the Shanghai Composite index peaked in 6124, the first wave of market adjustment。  In 2007, the Social Security Fund received 43.19% return on investment。  Investors in the greedy, very easy to make mistakes, always believe in yourself to run faster than others, always trying to catch the last wave。The simplest, but most stupid and most effective way is, when the market began to deviate to a certain extent lighten up。In the investment must be disciplined, do not hold much fantasy。  Behavioral finance is so important to understand the market, the concept of a large number of behavioral finance, case, use of the entire financial sector is very effective, human weakness in financial market performance thoroughly。  For me the greatest impact is that twenty Munger talked about miscarriage of justice in Southern California psychology, I read that too makes sense, and Munger although not included in the behavioral finance classical writers, but he understanding the behavior of financial analysis and judgment, and not inferior to any other financial experts。Munger is my guru worship, he was too wise, he psychological explanation for market behavior, so I have a feeling enlightened。  China Fund News reporter: the stock market crash of 2008, the Shanghai Composite Index fell 65%, the social security fund investment income is -6.79% in advance to lighten up after 2007, yet you have done what actions?  Li Keping: Social Security investment team after the stock holdings, basically all buy long-term bonds and financial bonds。In 2008 ten-year bond was up 15%, this investment is not only to avoid the loss of the 2008 stock market crash, also received a good income。  Fourth quarter of 2008, the Shanghai index below 2000 points, the Social Security investment team started relatively substantial Opening, 2009, the stock market rebounded sharply, the social security fund as a whole received 16.12% return on investment, return on net equity portfolio of more than 30%。  April 2015, the Council left side to lighten up again before the stock market peaked。  Of course, some of our colleagues feel that there are some regrets, 2005 Opening enough, lighten up in 2007 is not cruel, but this is hindsight, did the right thing, you will feel the golden mean, do wrong, I will feel It had been too aggressive。  Overall, I am in favor of leaving room, do not go to extremes, especially for such a sovereign fund social security fund, the cautious is better。  15% annualized excess return was shocked international counterparts China Fund News reporter: do you manage the social security fund for 11 years, what experience to share?  Li Keping: In 2010, I attended an international forum in Switzerland pension, which is a purely internal 50-person membership seminar。My keynote speaker and CEO of a prominent US pension funds, he is entitled to buy and hold (BUYANDHOLD), said the thrust of this strategy is to deal with financial crisis。My question is: how to beat the market by dynamically adjusting the high volatility in the market environment。  We were talking about two completely opposite investment strategy, which is Western and Chinese pension administration two extreme directions。  I took out the data the Social Security Fund in June 2003 raised funds entrusted management of 12 pure equity portfolio, annualized excess return of 15%。  After listening to their response is "ah, how could?It will not be wrong?15% of the excess return is still full benefits?"I replied that excess returns。  They ask: how to make this possible pension?  Have a clear chart, the trend of the stock market index, the Social Security Fund of the barn and out of, basically Opening lows, highs exit, of course, there are still some excess return from active management of the portfolio manager on my PPT。  I said two points: First, the Chinese market with the international market is not the same, high volatility, if you buy and hold does not move, the Social Security Fund income is likely to be zero; second, the process of drastic change in China's stock market , there has been very significant underestimation and overestimation, we have no reason not to operate。  However, this is misleading, that the Social Security Fund is optional when。The issue of market timing has been very controversial, many organizations have advocated market timing is indispensable。  We operate in the form of more like choose, but our starting point and the goal is definitely not choose。  We do not believe in the concept of market timing is operating, but why do we have such a behavior in the form of?We refer to this adjusted called dynamic asset allocation。  Upstream institutional investors such as pension funds, the configuration is the most important。  Configuration is a science-based approach to study each respective asset class risk-return characteristics and operation rules, and respect for these laws to do long-term configuration。Configuration Manager is selected and we can not shirk the responsibility of any one agency or knowledge of the social security fund managers are not as Council itself, would be impossible for you to consider the long-term profile。  In the upper reaches of institutional investors, the Yale endowment fund of David。Swanson greatest contribution, no one could overtake him。Yale Endowment least when only 13 people, only basic configuration and select managers, all the background delegating。They established a theoretical system that we can learn from。Buffett is great, but his ideas and methods more suited to an investment manager, does not apply to upstream investment institutions。  On the large configuration really works, is that we believe to adhere to the basic principles and basic common sense: first, is based on judgments of value, slightly overvalued or undervalued may not be allowed, but obviously overestimated or underestimated is obvious, and it is quantifiable; second, the stock market is the basic law of regression to the mean, too high or too low will not last long, will eventually return to the vicinity of the mean; the third is investment discipline, it is the asset allocation rebalancing, then the concept of balance is standard after triggering automatic (mandatory discipline) back to the beginning, put up much of sell replenishment rate of the asset does not reach。We are not operating in the strict discipline of rebalancing, because the market is still a lot we can not answer the unknown, or to leave room。  In my opinion, common sense is more effective。  Basic knowledge of these factors is to promote dynamic configuration adjustments。As a party, in retrospect, the Council is not what profound things complicated?Actually it not, quite simply, is to respect market rules back to common sense, believe in common sense, and common sense do not deviate。  View: Why the lack of public fund to be long-established genes?  China Fund News Reporter: This year is the Foundation established the industry for 20 years, how do you see the development of the fund industry?  Li Keping: public fund set up from the beginning, regulators have invested a lot of energy, constantly improve relevant laws and regulations, even if there are some problems in the 20 years of development, the fund industry as a whole can continue to regulate the development of a transparent system and strict the regulation is the key to continued construction and specifications of the relevant laws and regulations is crucial to the development of the fund industry。  Now, the public fund industry is still large information management industry norm of a most sub-sectors。But I always feel some regret that raised funds there are significant flaws in the governance structure。  Ask a question, existing raised funds, including some excellent companies it can be a hundred years old?  My answer is more difficult。  Because, even though a good public fund management team can be sustained for 20 years, regardless of the past or the future, you can do the math, there are several to achieve?According to my observation it was really difficult。We're not active members of the management team to leave, but were forced to leave。  If you own an excellent management team for 20 years is not stable yet, its core investment team can maintain more than 20 years it?I still can not answer, but the actual situation is actually even worse。  Why China has the world's largest number of private equity funds?  I always am feeling this point, when I deal with the international financial institutions, my observation is that private equity funds, the most active and most typical of hedge funds and private equity funds and venture capital, as there is no such a large number in China make private equity investments on the secondary market for small companies, small teams。  Of course, it is a private equity investor class, but a very small proportion in the world can not see a thousand, why the Chinese market so much?Since a considerable part of the domestic public offering or other financing pipe industry to private investment manager。  Very simple, they are to give themselves to create a better platform to play to their ability, why they believe that the existing institutions can not give full play to their abilities and roles, and take risks to set up private energy?  I do not think private equity is the best choice for most people, as a form of private equity asset manager's presence is normal, but it should be a small part, should not be subject。  Our private equity funds everywhere, this is unusual and reflects our normal system in use, and retention of outstanding professionals must be defective。  This is a very important point, need to begin to reflect the corporate governance structure, how to be able to establish a framework and long-established genes, rather than the water-like, lantern-style substitutions。  Frequent substitutions, regardless of who is lost。For individual investors to institutional investors are also lost, because from the investment point of view, very important that the fund company, the stability of historical performance of the fund manager, the product, as well as investment research team's run-in and reliability, if the total is the replacement of old or even entirely new, is an investor uncertainty and risk。  In addition to the Fund's governance structure, institutional investors own problems to be solved。  We have been advocating that there should be more institutional investors, which means that from the client's point of view, including the social security fund, annuity, insurance, family funds。Investors in this market does need education, not only retail investors have herding, herding us a lot of institutions that is not weaker than retail, but their power is larger than retail。  Previously, the SFC leadership told me that the social security fund really helped us a great favor, so we called a lot of things for many years, and how to force fund companies can not implement, have requested can not do, or social security fund with the money handy, you make demands, they must do it。  This tells a very objective reality, the construction of this market and improve investor is critical, personal and weaker retail experience and to improve only slowly, but institutional investors are likely to change, and institutional investors process of change, the various types of investment funds should return to nature itself, such as enterprise annuity, the annuity should be in a manner closer to the nature of the business to request the administrator, but not as speculative funds, like to use, what kind of funding for what style to operate, various types of funds according to their nature of an investment, this market will not be too disorderly behavior, and can form a relatively good ecological。  Now, the administration can not figure out what is the nature of money is commissioned, the wind today, rain tomorrow, and if so, can not withstand any fund manager, the best way can only say that I do not want your money, but what fund managers It can be said not to the customer's money?  Fund managers can not hate the old, old with new money do not care about money, you have to honor the original commitment, if the scale of funds affected the effective implementation of the investment strategy, reducing the ability to maintain original performance, we need to control the scale。At home, can do that very few companies or fund managers。  Internationally, there are a few really good management company or fund managers have a belief, can not get in the door to give money, because to be responsible for the customer, and the customer first is the existing customer。If you keep thinking so that new funds continue to come in, strictly speaking, he is actually only responsible for his management fee。  Fund managers dare to say NO to the expansion of the scale, give up the management fee, to a commitment to customers and long-term performance。I think, in the evaluation of fund managers, he is already very good, beyond a grade than the average fund manager。  New Deal for large information management and information management industry, is both an adjustment, but also contains some opportunities, relatively speaking, the impact is relatively small public fund。  Raised funds in product innovation and development, need to spend more effort, not just the continuation of the tradition of classic。Chinese market investors very rich, diverse demand, raised funds should be more a sense of innovation, to better meet the needs of investors, personalized。  Huge space Chinese asset management industry, the growth of public fund there is still space, but the space is just a general statement, more importantly, in product innovation and more to understand the needs of investors, on the characteristics of the product structure the need to adapt better investor, so that there is a better foundation for business development, in order to make this space can seize the opportunity to become a reality, otherwise, the so-called development of space industry does not make sense。