Recent monthly reports from multiple private equity funds reveal the latest investment strategies of major players in the market. As key participants, the moves of billion-dollar private equity funds offer critical insights into market trends.

Data from Private Equity Ranking Network shows that as of October, the average stock position of subjective long-short strategy private equity funds stood at 78%, unchanged from September and remaining at a multi-year high. Despite a sideways market in October, the proportion of funds running full positions or using leverage rose to 25.3%, while over 90% maintained positions above 50%. This indicates that after rapid gains in Q3, private equity funds opted for sector and stock adjustments rather than large-scale retreats—a direct reflection of "structural opportunities" in asset allocation.

**Performance Review: Notable Divergence Amid Broad Gains** By October-end, most private equity products delivered positive returns, but performance varied significantly.

Springs Capital's aggressive strategy paid off, with one product launched in 2019 yielding over 70% YTD by September. Its global growth and balanced series also posted returns exceeding 50% and 40%, respectively.

Qinchen Asset also performed strongly, with two flagship products managed by Cui Ying and Lin Sen (both launched in 2022) each delivering over 30% YTD returns by September.

At Hillhouse Capital, different fund managers exhibited distinct styles. Deng Xiaofeng's flagship product (launched in 2019) saw a pullback in October but still gained over 25% YTD, with an annualized return of 17% since inception. Other managers, including Zhuo Liwei, Wu Renhao, and Sun Qingrui, also posted robust gains, with some Q3 returns exceeding 20%-30%.

In contrast, more conservative funds lagged. Ningquan Asset's two products (launched in 2018 and 2021) returned around 12% YTD by October, with the firm admitting it "fell behind the market and peers" due to avoiding hot sectors and holding traditional stocks.

Lin Yuan Investment's flagship product (2018) lost 5.69% YTD, dragged down by its overweight positions in healthcare and consumer sectors, which underperformed in the recent rally.

Overall, performance divergence stemmed from investment style differences. Funds that bet early on AI, electronics, and healthcare outperformed, while those focused on financials, real estate, and traditional consumer sectors lagged.

**Strategy Shift: Profit-Taking and Portfolio Rebalancing** Since Q3, private equity funds have embraced "rebalancing"—trimming overbought assets and adding those with higher potential or safety margins.

Springs Capital noted it "locked in profits by partially selling holdings after sharp rallies." Deng Xiaofeng also mentioned "taking profits on fast-rising positions" in October, reflecting caution toward overheated sectors.

Proceeds were redirected toward a balanced "offense-defense" strategy:

- **Offense: Tech and Healthcare** Springs Capital added top-tier electronics firms and high-potential healthcare companies. Cui Ying at Qinchen increased concentration in "Hong Kong-listed internet leaders." Rido Investment allocated ~30% to internet application firms.

Hillhouse managers actively adjusted portfolios: Deng Xiaofeng boosted tech hardware, healthcare, and consumer stocks; Zhuo Liwei added AI-related internet platforms; Wu Renhao focused on advanced manufacturing and tech hardware/software (50% combined).

- **Defense: Domestic Demand and Low Valuations** Some funds turned to overlooked domestic sectors. Lin Sen highlighted "significant expectation gaps in real estate, airlines, and liquor," seeing them as future alpha sources.

Qiu Guolu at Hillhouse maintained large positions in internet and financial leaders while adding industrial and consumer blue-chips, sticking to value investing.

**Outlook: Structural Slow Bull with Risks Ahead** Most funds remain cautiously optimistic, expecting a "structural slow bull" market driven by deep fundamental analysis rather than broad rallies.

Springs Capital noted "quality firms are fairly priced amid ample liquidity." Deng Xiaofeng observed improving corporate earnings in Q3 reports. Rido’s founder Wang Wen even predicted "a second-phase bull run lifting the A-share market above 4,500."

However, risks were flagged. Ningquan warned of "bubbles in hot sectors," while Qiu Guolu pointed to "froth in small/micro-cap stocks."

**Sector Focus: Tech, Healthcare in Spotlight; Financials Stand Out** Views diverged on tech, healthcare, and financials, hinting at potential market rotations.

- **Tech: Mixed Sentiment** Bullish funds cited localization urgency and improving fundamentals. Xing Shi Investment listed AI as a top theme. Hillhouse managers heavily weighted tech, though focuses varied—Deng Xiaofeng’s flagship held over 36% in IT, while Wu Renhao concentrated on AI infrastructure.

Skeptics like Lin Sen cautioned about valuations and uncertainties in "hard tech," while Qiu Guolu’s lower tech allocation reflected prudence.

- **Healthcare: High Consensus** Widely favored for its "long runway," healthcare saw broad upgrades. Xing Shi, Springs Capital, and Hillhouse’s Deng Xiaofeng highlighted the sector, citing reasonable valuations and rising global competitiveness of innovative drugmakers.

- **Financials: Contrarian Bet** Qiu Guolu’s flagship held financials as its top sector. Rido’s Wang Wen disclosed a 60% financials overweight, betting on mean reversion versus tech-heavy markets.

Materials and industrials also gained traction, with Hillhouse’s Deng and Sun Qingrui allocating over 40%, anticipating policy support and global manufacturing strength.

In summary, private equity strategies reflect a nuanced balance between growth sectors and undervalued defensive plays, with structural opportunities driving the next phase of market evolution.