Asia-based hedge funds including those managed by Tybourne Capital Management (HK) sold American depository receipts of some Chinese companies in the fourth quarter, seizing a rebound before the slump resumed.
Tybourne cut holdings in Alibaba Group Holding Ltd. in the final three months of 2015 after emerging among the largest hedge-fund buyers of the Chinese e-commerce stock in the prior quarter, according to a filing with the U.S. Securities and Exchange Commission. Myriad Asset Management and Sylebra HK were among hedge funds that also sold ADRs of Chinese companies in the fourth quarter, according to data compiled from 13F filings disclosing stakes in U.S.-listed shares.
The Bank of New York Mellon China ADR Index jumped 16 percent in the three months ended Dec. 31 as the Chinese government took measures to stimulate a slowing economy. That increase offered relief to Asia-focused hedge funds, which had suffered the biggest quarterly loss in four years in the third quarter amid a stock rout. The reprieve proved short-lived as the China ADR gauge plunged 12 percent last month, as worries mounted that the nation would tighten control over capital outflows.
Tybourne sold its entire holding of 5 million Alibaba ADRs valued at $295 million at the end of the third quarter, according to data compiled by Bloomberg. Myriad cut the number of Alibaba ADRs it owned by about 28 percent. Alibaba ADRs jumped 38 percent in the fourth quarter. They’ve declined 18 percent this year through Wednesday.
Led by Hong Kong-based former Lone Pine Capital Asia head Eashwar Krishnan, Tybourne managed about $3.7 billion in hedge and long-only funds by November and disclosed an Alibaba holding for the first time in the third quarter. Myriad, helmed by former Highbridge Capital Management Asia chief Carl Huttenlocher, manages more than $4 billion in hedge funds.
The quarterly filings do not provide the precise timing and pricing of transactions. For managers investing the bulk of their assets outside the U.S., the filings only provide partial glimpses of their trading. Funds are also not required to disclose bets against stocks involving selling borrowed shares, or when they are part of hedged trades.
Apart from Alibaba, hedge funds also sold out of other e-commerce, technology, health-care and education company ADRs in the fourth quarter, the data show.
Other money managers bought Chinese companies trading in the U.S. BlackRock Inc., the world’s biggest asset manager, increased its holdings in China ADRs by 500 percent following a decision by MSCI Inc. to add the companies to indexes tracked by exchange-traded funds. The New York-based firm increased its combined holdings in 14 ADRs including Alibaba and Baidu Inc. to $4.3 billion, according to its latest disclosures.
Myriad sold ADRs of iKang Healthcare Group, according to data compiled by Bloomberg. The provider of corporate preventative healthcare’s ADRs jumped 38 percent in the three months ahead of the intensification of a bidding war from two competing groups to take it private.
Sylebra exited its stakes in online travel site Qunar Cayman Islands Ltd., which rose 75 percent in the fourth quarter, and in automobile information website operator Autohome Inc., which rose 7.4 percent. Qunar ADRs plummeted 29 percent this year through Thursday, while Autohome fell 27 percent.
Hong Kong-based Sylebra, led by ex-Coatue Management employees, oversees about $1.1 billion of assets in a global equity long-short fund that focuses on telecommunications, technology and media companies.
Spokesmen for Tybourne, Myriad and Sylebra declined to comment.