Dongfanghong Asset Management announced on March 24 that Deng Jiongpeng, the company's managing director and head of the fund portfolio investment department, has stepped down from all his managed FOF products due to personal reasons, with no internal transfer arrangements. Industry insiders suggest the veteran FOF manager is likely to join Tianhong Fund next.

Deng's departure has redirected attention to Dongfanghong's FOF business—a segment once central to the company's "wealth management solutions" ambitions, now facing a severe talent gap crisis.

The remaining team consists of just two portfolio managers: Chen WenYang and Xu Yuning. Chen, the more experienced of the two with nearly six years of fund management experience, currently oversees nine FOF products spanning various risk profiles, including conservative, balanced, and aggressive target-date retirement funds, as well as standard FOFs.

His portfolio includes funds such as Dongfanghong Yihe Aggressive Pension Target Five-Year Hold, Dongfanghong Yihe Balanced Pension Target Three-Year Hold, and Dongfanghong Yingfeng Conservative Allocation Six-Month Hold, the latter being his largest fund with assets of 1.919 billion yuan.

Xu Yuning's situation is notably unique. His record shows only 0.07 years of management experience, equivalent to less than one month in the role. On March 3, he took over two funds previously managed by Deng: Dongfanghong Xinhe Aggressive Three-Month Hold and Dongfanghong Xinhe Balanced Allocation Two-Year Hold. The combined assets of these two funds amount to approximately 1.114 billion yuan.

This "experienced-and-newcomer" duo is now responsible for 11 FOF products covering a wide range of types, including equity-biased, bond-biased, balanced hybrid FOFs, and target-date retirement FOFs with varying holding periods. The diverse investment strategies and risk profiles place high demands on the managers' expertise and time allocation. Managing over five products per person with such broad scope is uncommon in the industry.

Performance-wise, the remaining managers' track records are not particularly strong. For instance, several of Chen's target-date retirement FOFs show annualized returns around 3%. The more aggressive Dongfanghong Yihe Aggressive Pension Target Five-Year Hold A gained 13.33% over the past year but declined 2.49% year-to-date, indicating significant volatility.

Xu, having managed funds for less than a month, has no verifiable performance record yet. Prior to his departure, Deng's Dongfanghong Xinhe Aggressive Three-Month Hold A fell 3.06% year-to-date, while Dongfanghong Xinhe Balanced Allocation Two-Year Hold A dipped 0.07% year-to-date but rose 16.22% over the past year.

Compounding these challenges, FOF assets have been shrinking. After peaking at 9.896 billion yuan in the second quarter of 2025, assets declined in subsequent quarters, dropping to 8.015 billion yuan by year-end.

Within Dongfanghong's overall product structure, which includes 131 funds totaling approximately 218 billion yuan in assets, the 11 FOF funds represent only about 8.3 billion yuan, or 3.8% of total assets. In contrast, equity, hybrid, and bond funds contribute 12.8 billion, 89.6 billion, and 62.5 billion yuan, respectively. This clearly positions FOF business on the periphery of the company's strategic focus.

Regarding Deng's departure, Dongfanghong stated it will leverage its research strengths in multi-asset and multi-strategy areas to drive FOF product innovation and refined operations. Industry analysts believe the transition may proceed smoothly due to the company's recently enhanced investment research platform.

However, whether a platform-based approach can fully offset the loss of key talent remains uncertain, particularly in FOF management, which heavily relies on individual expertise, market judgment, and decisive action during critical moments. The current two-man, eleven-fund scenario not only highlights weaknesses in Dongfanghong's FOF talent pipeline but also reflects broader challenges facing the established asset manager amid strategic transformation.

Frequent departures of core personnel, performance setbacks due to misalignment with market trends, and sluggish strategic shifts have collectively placed the former "asset management benchmark" under unprecedented pressure. For Dongfanghong's FOF business, the immediate priority may not be expansion but stabilization—securing the team, maintaining product performance, and restoring investor confidence as essential first steps to navigate this talent vacuum.