Li Lu

Li Lu is the founder and chairman of Himalaya Capital, a value-oriented investment partnership best known for its early and concentrated bets on Asian equities and for the unusually close intellectual bond he shares with Warren Buffett and Charlie Munger. Born in Tangshan, China, in 1966, he survived the devastating 1976 earthquake as a child, later became a student leader, and then emigrated to the United States. At Columbia University he accomplished the rare feat of earning three degrees simultaneously—a B.A. in economics, a J.D., and an M.B.A.—by 1996.

A Conversion to Value Investing

Li Lu's turn toward investing began in 1993, when as a Columbia student he heard Buffett deliver a lecture on the principles of stock market investing. The clarity of the argument—that one could compound wealth simply by studying the underlying value of a business—converted a skeptic into a lifelong disciple. He immersed himself in Buffett's letters and Benjamin Graham's The Intelligent Investor, and by the time he graduated he had already made his first investments with his own savings.

In 1997 he founded Himalaya Capital. His style was initially closer to conventional long-short investing, but after meeting Munger on Thanksgiving Day in 2003 his approach was transformed. Munger became mentor, friend, and investor, entrusting Li Lu with the Munger family's personal capital and calling him "China's Warren Buffett." Munger later said Li Lu was the only outside manager he had ever invested with.

The BYD Connection and Berkshire

Li Lu's most consequential contribution to the Berkshire ecosystem was introducing Berkshire Hathaway to BYD, the Chinese battery and electric-vehicle maker. Acting on his recommendation, Berkshire acquired a 10% stake in 2008 through MidAmerican Energy, a position that would grow manyfold as the company's fortunes rose. Li Lu remains an informal advisor to BYD and holds a small ownership stake through his partnership.

Buffett's public confidence in him was unambiguous. In the 2005 annual letter he wrote that he and Munger had known Li Lu "for a long time and admire him greatly," explaining that Berkshire would become the sole outside partner of his firm to manage its Asian equity investments. For a time Li Lu was discussed as a possible successor to help run Berkshire's portfolio, though he withdrew from consideration in 2010.

Philosophy and What Investors Can Learn

Li Lu describes his mantra as "accurate and complete information" and stresses intellectual honesty above all—the willingness to admit "you don't know that you don't know." His portfolio targets durable, long-term compounders with a genuine economic moat, purchased only within his circle of competence and at a price that affords a margin of safety relative to intrinsic value. He concentrates heavily, holds for years or decades, and judges businesses by their owner earnings rather than reported accounting figures.

For the serious investor, Li Lu is a bridge between the American value tradition and the opportunities of Asia. He demonstrates that the discipline Buffett and Munger perfected—patience, concentration, and a refusal to overpay—translates across markets and cultures, and that the most important edge is not information but temperament and honesty.