Himalaya Capital — The Quiet Genius of Value Investing

Li Lu is probably the most underrated investor in the world. A Tiananmen Square survivor, Charlie Munger's protégé, the man who convinced Berkshire Hathaway to invest in BYD — and yet most investors have never heard of him. Himalaya Capital is his investment vehicle, managing a relatively small portfolio with extreme concentration.

Key Facts

The Extraordinary Story of Li Lu

From Tiananmen to Columbia

Li Lu was born in China in 1966. In 1989, as a student at Nanjing University, he was one of the student protest leaders at Tiananmen Square. He miraculously survived the massacre and escaped China — arriving in the US as a refugee.

In America, he passed the exams and got into Columbia University, where he simultaneously studied at three schools — economics, law, and business. It was at Columbia that he attended a lecture by Warren Buffett that changed his life.

Meeting Munger

In 2003, Li Lu met Charlie Munger — Buffett's longtime partner at Berkshire Hathaway. Munger was so impressed that he entrusted Li Lu with managing a portion of his personal wealth. This is the highest honor a value investor could receive.

Munger publicly called Li Lu one of the best investors he knew and suggested he could one day manage Berkshire Hathaway — though that never materialized.

Investment Philosophy

Li Lu follows a pure value investing philosophy, closely aligned with Munger and Buffett:

1. Buy great businesses at reasonable prices — company quality matters more than low prices
2. Ultra-concentration — 8 positions makes it one of the most concentrated portfolios among major funds
3. Think like an owner — Li Lu treats stocks as business ownership, not trading papers
4. Patience is key — hold positions for years, decades
5. Circle of competence — invest in what you deeply understand
6. Margin of safety — always buy with a buffer for errors

BYD — The Investment of a Lifetime

Li Lu's greatest triumph is BYD (Build Your Dreams) — the Chinese battery and electric vehicle manufacturer:

• In 2008, Li Lu convinced Charlie Munger to invest in BYD
• Munger in turn convinced Buffett — Berkshire Hathaway bought 10% of BYD for ~$230 million
• By 2022, that investment grew to over $8 billion — one of the greatest returns in Berkshire's history
• Li Lu held a personal position in BYD through Himalaya Capital

BYD has become one of the world's largest EV manufacturers, surpassing Tesla in cars sold in China.

Top 13F Holdings (Q4 2025)

8 positions, zero small bets — every position is a deep conviction play. The portfolio shows classic value investing with emphasis on companies with strong moats.

Sector Profile

Despite the "value investor" label, Li Lu has significant technology exposure — but these are companies with strong moats generating massive cash flows, not speculative startups.

Portfolio Evolution Over Time

Li Lu's portfolio changes very slowly — consistent with his philosophy of ultra-patient investing:

Li Lu makes one to two significant changes per year — compared to Point72, which rotates 40-60% of positions quarterly.

Why BYD Is an Investment Masterpiece

The BYD investment deserves deeper analysis because it illustrates everything Li Lu does right:

1. Deep research — Li Lu spent months understanding the Chinese battery and EV market
2. Finding an exceptional founder — Wang Chuanfu is an engineer-visionary, not a financier
3. Contrarian timing — in 2008, few believed in Chinese EVs
4. Patience — holding the position for over 15 years, through ups and downs
5. Leveraging networks — convincing Munger, who convinced Buffett, gave BYD global credibility
6. Result: ~30x return, billions in profit

This is the template of a perfect value investment — and the reason Munger valued Li Lu so highly.

Management Style

Quiet and Humble

Unlike most hedge fund managers, Li Lu:

• Gives almost no interviews — public statements can be counted on one hand
• Avoids publicity — no conferences, panels, or social media
• Doesn't publish investor letters — unlike Buffett or Klarman
• Focuses exclusively on investing — no side ventures

Comparison with Other Value Investors

Performance

Li Lu doesn't publish official returns, but from available information:

Munger claimed Li Lu generated "outstanding" returns for decades — an extraordinary compliment from a man who has seen thousands of managers.

Key Risks of Himalaya Capital

1. Ultra-concentration — 8 positions means one mistake could cost 10-25% of the portfolio
2. China exposure — many of Li Lu's investments (beyond 13F) are Chinese positions, carrying geopolitical risk
3. Key man risk — Li Lu is the sole manager, with no known succession plan
4. Closed fund — inability to invest means the portfolio is effectively a family office
5. Lack of transparency — Li Lu publishes no letters, interviews, or commentary

The Impact of Charlie Munger's Death

Charlie Munger passed away in November 2023 at the age of 99. His death held symbolic significance for Li Lu:

• Loss of a mentor — Munger was not just an investor in Himalaya Capital, but a key advisor
• Continuation of philosophy — Li Lu is probably the purest continuation of Munger's philosophy
• Question about the future — without Munger's patronage, Li Lu loses an important connection to the Berkshire ecosystem
• Legacy — Li Lu is living proof that the Munger/Buffett philosophy works beyond Berkshire

Investor Takeaways

What Can You Learn from Li Lu?

1. Ultra-concentration requires deep understanding — 8 positions isn't laziness, it's courage
2. Patience is a superpower — BYD held for years delivered a 30x return
3. Seek mentors — the relationship with Munger shaped Li Lu's entire career
4. Humility doesn't mean weakness — lack of publicity doesn't hinder generating outstanding returns
5. Know your edge — Li Lu understands China better than most Western investors
6. Life experiences shape the investor — surviving Tiananmen gave Li Lu a perspective that's hard to gain otherwise

Comparing Approaches

• Li Lu — buy great companies, hold for decades, ignore market noise
• Tiger Global — buy the fastest growers, rotate quarterly
• Carl Icahn — buy troubled companies, force change

Himalaya Capital and US-China Geopolitical Risk

Li Lu possesses a unique perspective on US-China relations, being both a Chinese emigrant and an American investor:

• Understands both systems — sees both the potential and risks of each market
• BYD as a symbol — a Chinese EV leader with global reach, but exposed to sanctions
• Diversification — the 13F portfolio is purely American, suggesting a conscious hedging strategy
• Long-term perspective — Li Lu doesn't react to short-term political tensions
• Lesson for investors — understanding geopolitics is a significant edge in global investing

For investors interested in China exposure, tracking Li Lu's portfolio (both 13F and media reports on private positions) can provide valuable insights into how an experienced investor balances these risks.

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FAQ

Who is Li Lu?

Li Lu is a Chinese-American investor and founder of Himalaya Capital Management. A survivor of the 1989 Tiananmen Square massacre, Columbia University graduate, and Charlie Munger's protégé. He's known for his ultra-concentrated value investing style and early investment in BYD.

Why did Charlie Munger choose Li Lu?

Munger was impressed by Li Lu's intelligence, discipline, and character. He entrusted him with managing a portion of his personal wealth — the highest trust he could bestow. Munger publicly called Li Lu one of the best investors in the world.

How did Li Lu invest in BYD?

Li Lu discovered BYD during research on Chinese companies in the mid-2000s. He convinced Charlie Munger to meet BYD's founder, Wang Chuanfu. Munger was so inspired that he convinced Buffett — Berkshire Hathaway bought 10% of BYD in 2008 for ~$230M, which grew to $8B+.

Can I invest in Himalaya Capital?

Himalaya Capital is closed to new investors and has very high minimum thresholds. However, you can track Li Lu's 13F portfolio and draw inspiration from his ultra-concentrated approach to value investing.

Why is Li Lu so little known?

Li Lu deliberately avoids publicity — he gives no interviews, has no social media, and doesn't appear at conferences. He believes publicity hinders investing. This is rare in the hedge fund world, where most managers actively build their public image.

Does Li Lu only invest in the US?

No — while the 13F portfolio shows only US positions, Li Lu has significant investments in China and Asia that aren't visible in 13F filings. BYD is the most famous example, but Li Lu likely has more Asian positions. His dual Chinese-American perspective is a unique edge unavailable to most Western investors.

How is Li Lu different from a typical hedge fund manager?

Li Lu is the anti-hedge fund manager. He doesn't seek quarterly returns, doesn't hedge positions, doesn't use leverage, and doesn't rotate his portfolio. Instead, he buys great companies at reasonable prices and holds them for years. His approach is closer to Warren Buffett than to a typical hedge fund manager. Himalaya Capital is essentially a concentrated long-only fund, not a classic hedge fund.

What books does Li Lu recommend?

In his rare public statements, Li Lu has mentioned several key readings: "Margin of Safety" by Seth Klarman, "Poor Charlie's Almanack" (a collection of Munger's wisdom), "The Intelligent Investor" by Benjamin Graham, and Benjamin Franklin's autobiography. His approach to reading is similar to Munger's — interdisciplinary, combining business, history, psychology, and science.