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mark; its sales have taken off in China, where
the market for home and office printers is
growing far faster than in the West. Shan’s
fund also holds a majority stake in Zhenai,
a dating website. The mushrooming match-
maker boasts 140 million members, and it
posted roughly $400 million in 2018 sales. It
tailors its model to a fervent goal for Chinese
parents: finding an acceptable spouse for their
daughters, a service for which some parents
are willing to pay thousands of dollars a year
for VIP memberships. “In China, dating is
taken very seriously,” explains Shan. After a
man and woman meet online through Zhenai,
a female chaperone vets the man and oversees
the couple’s first meeting. “She’s there to man-
age expectations,” Shan says.
PAG is also betting on another social-
betterment business: China’s private schools.
“Chinese parents spoil their kids,” says Shan.
“More than 60% of the kindergartens in
China are private.” He seized on the trend by
purchasing Golden Apple, a chain in Chengdu
that runs 60 kindergarten centers, with total
enrollment of 15,700. Another PAG-owned
academy, Lily English in Beijing, educates chil-
dren from ages 4 to 12 in after-school courses
conducted exclusively in English. For Shan,
education is a model business that reinvests
only small dollops of earnings to generate big
gains. Through the first eight months of this
year, Golden Apple’s Ebitda has soared 42%, to
$31 million, with margins exceeding 30%.
When he visits Beijing, Shan says, he
sometimes meets with friends from his years
in the Gobi. Although they mostly recall the
black comedy of their life in the wilderness,
Shan is delighted when his old comrades talk
about how their children are benefiting from
the schools, entertainment, medical care, and
other choices in the New China, the panoply
he’s built a career around funding. “We were
put in a cage, and we couldn’t fly anywhere,”
he says of the old days. “The cage gradually
opened, and the people started to fly. It’s a
more open system that makes the difference.”
And it’s the folks in the malls and restaurants
and private schools who are now proving to be
that system’s greatest strength.Japan, for example. Japan’s own growth was tepid, Shan explains,
“but we thought [the park] would take off because of the explosive
growth of visitors from China and other Asian countries. And that’s
what happened.” PAG’s original investment was $120 million. In
2016, it sold its stake for $1.25 billion.
One of Shan’s biggest scores has been in digital music. Shan
saw huge potential in an owner of music copyrights called China
Music Corp. “It was a vehicle for purchasing the rights to songs,
lyrics, and music labels,” Shan explains, “and it owned 70% of all
the digital rights in China.” The problem: The streaming platforms
at the time were paying no royalties. But Shan anticipated that
legal trends in China would turn against music piracy. In 2014,
PAG invested $100 million in CMC, enabling it to buy two popular
streaming services—vertically integrating a musical rights holder
with a means of transmission. And in 2016, he helped orchestrate
a merger between CMC and QQ Music, the streaming platform
of tech conglomerate Tencent, to create Tencent Music Enter-
tainment. Today, that service’s dominant position has swelled its
audience to 800 million active users—and strong copyright en-
forcement means it’s earning huge revenue. Late in 2018, Tencent
Music went public on the New York Stock Exchange, and PAG’s
$100 million investment is now worth around $2 billion. Tencent
Music’s pop-oriented patrons don’t include Shan himself, who says,
“I only listen to classical music, and I don’t mind jazz.”
Shan’s portfolio currently consists of over 20 companies, most of
them private, in which PAG usually owns either 100% or a con-
trolling interest. Health care in China is one of Shan’s themes. “As
people become more affluent, they consume more and more of the
sophisticated treatment I could never supply as a barefoot doctor,”
he says. PAG’s health care investments include Jilin Yinglian, a lead-
ing maker of cardiac and central nervous system drugs.
PAG has also bet on the expanding culinary tastes of a more
affluent nation. One holding is Food Union, a Northern European
dairy-products purveyor that’s bringing its yogurt and ice cream to
China, where such treats are considered high-end delicacies. PAG
also owns a majority stake in China’s largest milk producer, China
Youran Dairy. “We own more than 100,000 cows, one of the biggest
herds in China!” says Shan, noting that thousands of them graze in
the pastures of his old haunt, Inner Mongolia.
Consumer-facing technology also fuels Shan’s strategy. PAG is
part of a Chinese consortium that owns Kentucky-based Lex-“We were put in a cage, and
we couldn’t fly anywhere.The cage gradually opened,and the people started to fly.It’s a more open system thatmakes the difference.”Weijian Shan