BEDROCK Podcast E21 – Full Transcript (New Year Special)“Four Years of Building a Private Fund: Vulnerability, Investment, Survival, and Art”

Topic One: Looking Back on the Ordeal and Reflection During BEDROCK’s Survival Phase

The impact of various “black swan” events in 2022 on NAV, company operations, BEDROCK’s investment methodology, self-doubt, and response

Claire:Do you mind if I start with a rather sharp question? BEDROCK was founded at the end of 2021, and this year marks four years of entrepreneurship. Every startup goes through a survival phase—usually around three years. I’ve read BEDROCK’s articles and noticed that in TC’s 2022 year-end reflection, there were quite a few changes, both in NAV and within the team, even some bitter moments. I think that for everyone to better understand why BEDROCK is what it is today, we need to go back to the early stages of the venture and hear those stories. Only then can we truly understand how we got here. So TC, could you share with us some of the moments from that year—whether in investment or team management—that left the deepest impression on you?

TC:When we started out at the end of 2021, we were prepared for difficulties, but overall we were still full of hope. Anyone who starts a business believes they’ve done reasonably well before and that they can succeed in the future—otherwise they wouldn’t start at all. We had experienced many hardships before: the 2008 financial crisis, the 2015–2016 market crash, and others. But what happened in 2022—by which I mean the whole year of black swan events, not just the stock market—was completely beyond anything we had anticipated. For us, it was a massive shock.

At the beginning, we also had very high expectations for China’s prospects. We felt that U.S. equities were expensive in 2021, A-shares were expensive as well, so Hong Kong stocks made up a significant portion of our portfolio going into 2022. The collapse of the Hong Kong market that year hit us hard. It wasn’t just an impact on NAV—our daily lives were affected too. During the Shanghai lockdown, the entire team had to work remotely.

More importantly, a series of government policies in China in 2022 fundamentally altered many business models. Real estate deleveraging under the “three red lines,” the crackdown on K-12 education, platform anti-monopoly regulations—many industries experienced profound structural shocks.

Claire mentioned the pressure on the team and NAV from the 2022 black swan events, but to me, the deepest impact was forcing a reassessment of business models, of how to invest in China going forward, and whether our own investment methodology—our very foundation—still worked. Whether we could still believe in ourselves as investors capable of delivering results.

Objectively speaking, 2022 was an enormous survival challenge for the BEDROCK team.

In such an environment, either clients might not be able to hold on—redeeming due to NAV declines—or the company itself might not survive, as AUM falls and expenses exceed income. We did operate at a loss that year. But the greatest pressure came from self-doubt: questioning whether we could still find good companies in this market, whether we still had the ability to achieve results. Once that confidence wavers, it’s very easy to shut everything down. Over the past three years (2023–2025), we’ve essentially been climbing out of a survival trough, gradually moving from survival toward development.

Claire:What surprised me is that this is the first time I’ve heard TC say that, during 2022, the biggest doubt was whether he could still invest well. Most founders doubt whether their company can operate, whether the team can function, or how to handle client redemptions. TC has invested for over a decade and proven himself at major institutions with strong past performance—yet in 2022, he began questioning himself at such a fundamental level.

TC:The significant changes and adjustments we made in 2023 and 2024—whether refining methodology, shifting focus areas, or adjusting strategic direction—were largely born from the shock of 2022. In hindsight, decisions made after acknowledging deep structural changes produced vastly different outcomes than simply grinding on in the wrong place. Some things have undergone fundamental change; others were only temporary. The ability to distinguish between the two is essential for professional investors.

Claire:You’ve already hinted at investment changes—we’ll discuss those later. Now that it’s the end of 2025, looking back, can you share how you handled that period of doubt? Did you share those pressures with the team? How did you work through them emotionally and intellectually?

TC:Some things simply can’t be shared with everyone on the team. Often, company-level pressures are something the founder bears alone.

1) Investment as a Non-Optional Passion

For me, investing is not optional—it’s not just a job; it’s what I love doing. Even under immense pressure, I could downsize the office or reduce headcount, but I would still invest. Even alone, I would continue. So while there were painful moments, I adjusted and moved on.

2) Looking Forward in Investment

If our methodology has flaws, we fix them. If an industry no longer makes sense, we change industries. If a company is wrong, we find a better one. Investment is inherently forward-looking. Even after major mistakes, as long as you focus on the future and believe in your core framework, you can climb out of the hole. The question isn’t whether you’ll recover, but how long it will take and at what scale.

3) Prior “Entrepreneurship” Within a Platform

When I joined Honsun Asset under Sequoia in 2016, managing only RMB 20–30 million initially, that was already a form of entrepreneurship. Over time, performance exceeded 30% annualized and AUM grew to nearly RMB 2 billion (past performance does not guarantee future results). That experience meant I didn’t carry a “halo” or ego burden. If things went wrong, I was prepared to start over.

Claire:Listeners can probably sense that TC is an optimist—which aligns with his ENFJ MBTI type. What strikes me is your decisiveness: you reflect, but you don’t ruminate. You focus on what to do next rather than being consumed by regret.

TC:You must reflect, but you must also move on. Entrepreneurs are, by nature, optimists. This optimism also shapes our investment approach—seeking compounders globally requires believing in the future.

Topic Two: BEDROCK’s Investment Research Team – Hiring, Training, and Collaboration

Building a unified, transparent methodology to empower researchers and amplify PM capabilities

Claire:What’s your vision for the BEDROCK team? You’re currently the only PM—how do you think about the future?

TC:I’m not a patriarchal leader by nature, but the team matters deeply. One reason I left a platform role was to build an independent team around a shared methodology and brand. A team allows us to amplify individual capability—one person’s cognitive bandwidth is limited. A team adds “extra arms and legs.”

Our methodology and values are clear and transparent. Anyone who works within this framework can see their contribution clearly. Long term, researchers can grow into sector experts or PMs. Otherwise, there’d be no point in starting this business.

Claire:So you’re building something like a “BEDROCK school” of investing? 😊

TC:Maybe not a “school,” but a group of like-minded people with shared values and goals. Even if the group is small, everyone can be happy and fulfilled.

Unique and Multi-Dimensional Hiring Process

Claire:Your researchers have strong backgrounds—PhDs from SJTU, master’s from Oxford and Cambridge. How did you find and select them?

TC:Hiring researchers is similar to finding investors—it’s mutual selection. Our values, methodology, and focus on global compounders naturally attract like-minded people.

We have a structured process: resume screening, written tests, interviews, and projects.

Claire:What kind of written tests?

TC:Back then, before GPT matured, they were highly original, not purely finance-based—logic, creativity, sociology, business analysis. Dozens of open-ended questions, bilingual, since we do global investing.

Some candidates wrote 20–30 pages. We’d give three days for the test, a week for projects.

Claire:So the test itself filters for curiosity and depth.

TC:Exactly. If someone finds it fun, that tells us a lot. Many candidates self-select out.

Claire:So cultural screening starts even before interviews.

TC:Yes. Many applicants already followed our WeChat account—they already resonated with our thinking.

High Research-to-Investment Conversion

TC:Two key differences:First, our goals and methodology are stable. Many institutions shift styles yearly, forcing researchers to constantly adapt. People stay busy but don’t accumulate insight.

Second, our team has strong goal alignment. Everyone knows what we’re trying to do.

All our models are built on the same system. Assumptions and data are transparent. This dramatically improves trust and conversion from research to investment. In many large firms, conversion rates may be only 10–20%.

Topic Three: BEDROCK’s Investment Philosophy – Compounding and Continuity

Long-termism and the challenge of paradigm shifts

Claire:Have there been times when, in hindsight, researchers were right and you were wrong?

TC:Our methodology is long-term and not highly flexible. Paradigm shifts are hard to recognize early. In 2022, some industries fundamentally changed, but distinguishing a true paradigm shift from a temporary setback is extremely difficult.

This is why we don’t pursue extreme concentration. Human cognition is imperfect. Diversification reduces psychological pressure and the cost of mistakes.

Pyramid Research Structure

TC:We model 400+ companies, actively track about 200, follow ~100 more closely, and maintain a core pool of ~50. Actual investments are in about a dozen names. Each researcher deeply covers ~10 companies—this is sustainable and effective.

Global Investing: Bottom-Up, Not Region-Driven

TC:We don’t pre-allocate by region. The portfolio’s geographic mix is a bottom-up outcome. If more qualifying companies are in the U.S., exposure rises naturally. There’s no top-down regional judgment.

Investment as Engineering, Not Speculative Art

TC:We don’t treat investing as art. We treat it as an engineering problem—systematic, replicable, explainable. We avoid things we can’t explain or reproduce.

Our name, BEDROCK, reflects this: investing in companies with enduring, compounding power.

Topic Four: Looking Ahead to 2026

Claire:As a New Year’s special, what are your hopes for 2026?

TC:We think long term. But specifically, I hope that from 2026 onward, BEDROCK fully transitions from survival into a more stable development phase.

AI gives us unprecedented leverage—both as an investment theme and as an organizational tool. This era feels full of possibility. With powerful tools, everyone feels a bit like a superhero.

2026 is the Year of the Horse—a year of momentum and takeoff.

Claire:TC lights up when he talks about the future. This episode closes 2025 and opens 2026. Thank you all for being with us. We hope to bring you more thoughtful, engaging stories—about investment, industries, and life at BEDROCK.

TC:Thank you all. Wishing everyone a great Year of the Horse! 😊