Most little girls like stories of romance and adventure at bedtime. Not Kathy Xu. When she was growing up, she loved tales of the state-owned truck factory her father ran in the Sichuan provincial town of Daju. "I would talk to Dad about managing people and products," she recalls. "I've always been curious about business."
Xu's early interest has served her well. As head of China investments for the Baring Private Equity Partners Asia fund, she has picked winners again and again. So far, on investments of $50 million in eight companies, she has cashed out $101 million and is sitting on another $38 million in paper profits. Her best bet: info tech services company Vanda Systems & Communications Holdings Ltd. She bought shares worth $3.6 million in 1998, then sold the stake for $35 million in 2000. In all, six of her investments are in the black and one remains private. Only one has soured.
She attributes her success to self-discipline and tenacity. She held on to Baring's stake in NetEase even when the Chinese Web portal, which listed at $15 per share, saw its share price plunge to 65 cents. Xu says she always believed in NetEase. She was right: The stock has since soared to $43, and her initial investment of $5 million is now worth $40 million.
Now Xu is about to close a $16 million investment with a company that makes talking Chinese-English dictionaries. She has five more deals in the works. Her favorite hobby is meeting with entrepreneurs to find the next big thing. "I want to make lots of money for entrepreneurs, investors, and myself," she says. And as the mother of an infant son, she's ready to regale a new generation with tales of business.