From the Gobi to Private Equity
How I Got My Start in Finance
Featuring Weijan Shan
Published on: July 22nd, 2019 • Duration: 10 minutesWeijan Shan, former professor at Wharton and the manager of a private equity fund in China, discusses his upbringing in Chairman Mao’s China in the 1960’s and 1970’s. Shan shares stories about teaching himself math and English by candlelight, and working in a labor camp in the Gobi Desert. He also shares his unique perspective on bullshit. This clip is excerpted from a video published on Real Vision on January 18, 2019 entitled “Survival of the Fittest Investor.’”
JUSTINE UNDERHILL: This week on How I Got My Start in Finance, we have Weijan Shan. The notable investor chats with Brian Price about his humble beginnings and how he persevered in the face of momentous challenges. Hear him describe his harsh upbringing and ultimate success.
WEIJIAN SHAN: I didn't choose my life. It was chosen for me, especially growing up in China during that period of time. I wrote this book. It's a recount of history- the most horrible part of Chinese history that I lived through. And my story is rather unique, but also very representative of my generation. And at that time, there was not much choice. You just did whatever you were told to do, or you're assigned to do. And I was sent to the Gobi Desert.
It was not until the end of the so-called cultural revolution in 1976, when everything came to an end, China, in 1979, opened up, established a relationship- diplomatic relationship- with America under Jimmy Carter. And the next year, I had an opportunity to come to America to study. That's how it happened. After that, I had some choices- choices of which school to go, choices of what to study. And it was in this country I find choices.
BRIAN PRICE: You oversee $30 billion. You're one of the world's most respected investors out of Asia.
WEIJIAN SHAN: That's dwarfed by American private equity firms like Blackstone.
BRIAN PRICE: Fair enough. And they are one of your backers.
WEIJIAN SHAN: Yes.
BRIAN PRICE: Along with several US pension funds.
WEIJIAN SHAN: We're grateful to them for their trust.
BRIAN PRICE: So I want to take a step back and talk about how you got to where you are, success or not. Because I want folks to understand that when I say the Gobi Desert. And your book, Out of the Gobi, discusses, in large part, leaving Mao's China to have to do hard labor in the desert. Talk to me about that hard labor. What was that? What was that like? How did that shape you to become the man you are today?
WEIJIAN SHAN: School came to the end for me when I was 12 when I finished elementary school. The country was in chaos. Schools were shut for about 10 years. And when I was 15, I, together with my friends, classmates, were sent to the Gobi Desert. We had to do very hard labor. We were told to grow crops in the desert. Now, you can imagine how hard that is. And not surprisingly, we were not too successful, talking about success.
We had to build huts- shelters for ourselves- because there was no place to live. I made bricks. That was a backbreaking job. We had to work 16, sometimes 18 hours a day. Backbreaking. And some people became sick and permanently disabled. It was very cold in wintertime- something like minus 10 in wintertime. The bad part is that that's the temperature inside and out. There's no heating. There is no fuel.
The only fuel available was dried cow dung- cow manure- which we collected and burned for 10, 15 minutes before we got into bed- if you can call it a bed- every night. That was the only source of heating, and, otherwise, minus 10 inside and out. If there's a blizzard, to go out to the outhouse was life threatening. It was a big risk that you would have to take. And don't ask me how we coped with that.
So when I first came to this country, I hear people talk about this expression. If they don't agree with each other, they say, bullshit. And I would think to myself, that thing used to be very dear to me. And that was the only source of heating that we had. So to this day, I like to sit by a fireplace, because we experienced so much cold. And that life didn't come to an end until about six years later. And of course, the worst thing during that period of time was starvation. There was never enough food to eat. If you looked at me, I'd probably look emaciated to you. And that was the starvation from that time.
BRIAN PRICE: And then you were able to teach yourself math by candlelight, if I'm not mistaken.
WEIJIAN SHAN: I did, in an unsystematic way. I just read whatever books I could lay my hands on. And there was no school, as I mentioned, for 10 years. So very few people bothered to read, to study. And in fact, all the books were banned. Reading was frowned upon. I got into trouble by doing it. But at the end of it, I was somewhat educated, because I didn't give up. And eventually, I was able to obtain a formal education, including a PhD from UC Berkeley.
So when I look at the kids today, especially in this country, I think they are so privileged. They have the education. Unfortunately, many people take that for granted. We couldn't. It was a privilege that we didn't have. But studying, reading, got me where I am today. Had I given up, like most of my peers at the time, I would not have had a job at this particular point, as most of my friends have long lost their jobs.
When China opened up, they didn't have any skills to obtain any decent jobs. Because for 10 years, there was no education. So education, to me, is the most important thing. It gets you to where you need to be, or where you want to be, especially in this country.
BRIAN PRICE: So teaching yourself math, teaching yourself English, to then getting your education in the US and eventually becoming a professor at Wharton. In your wildest dreams, did you ever think that such things could be possible? And do you think, outside of America, that type of dream is possible? Or is this something that only in America, that could happen?
WEIJIAN SHAN: At that time, I didn't have any dreams. Because we were told to take root in the Gobi Desert. So I was prepared to spend the rest of my life in that place. But I also told myself, I have to prepare myself. My philosophy in life is to be always prepared. I believe that, sometimes, you just don't have opportunity to get anywhere. But when the opportunity comes, if you're not prepared to grasp it, it's your fault. If opportunity never comes your way, then it's not your fault.
So America is where, as long as you want to get to some place, I think the opportunities are more or less equal. It's not completely equal, to be honest. But it's more or less equal. I came to this country without money, without money to pay for tuition. A professor donated money to cover my tuition. And eventually, many kind people helped me to get a formal education. So I'm very fortunate to benefit from the generosity of ordinary people in this country and from America itself.
Now, China has opened up. So there's more equal opportunities for ordinary people to get to some place. But that was not the case 40 years ago, when China was still very much closed under a different system.
JUSTINE UNDERHILL: From teaching himself math in a work camp in the Gobi Desert to earning his PhD, and to running his own fund, Shan has a shining example of taking advantage of opportunity to a better one flat in life. For Real Vision, I'm Justine Underhill.