(Bloomberg) – When famed wealth manager Michael Burry made headlines in the first quarter of this year when he made bullish bets on stocks like Alibaba Group Holding Ltd.
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Moore Capital Management and Third Point LLC were among the top buyers of US-traded shares of the Chinese e-commerce giant in the first quarter, according to an analysis of hedge funds compiled by Bloomberg from 13F filings. The data showed that a handful of Asia-based competitors were among the biggest sellers.
The only Asia-based company among the top 10 buyers was Aspex Management (HK) Ltd. Hermes Li, which had $7.2 billion under management late last year, according to data compiled by Bloomberg from quarterly regulatory filings.
Six Asia-based companies including Segantii Capital Management Ltd. and Alpine Investment Management Ltd. by Simon Sadler, accounted for nearly half of the Alibaba ADRs sold by the quarter's top 10 hedge fund sellers. Tairen Capital Ltd., Prime Capital Management Co.Ltd. and CoreView Capital Management Ltd. have completely abandoned their positions. According to the data, Segantii and Ariose Capital Management Ltd. most of the Alibaba ADRs they owned at the end of December until March.
Alibaba's ADRs have lost about a third of their value since peaking this year in January, following news that SoftBank Group Corp. plans to reduce its stake and geopolitical tensions increased.
Read more: Michael Burry Doubles Alibaba Stake in Big Bet on China Tech
Among the first-quarter sellers was Segantii, which manages a roughly $6 billion hedge fund that has posted a single year of losses since its inception in late 2007. Founded the same year, Tairen reported $5.9 billion in gross assets at his hedge fund in one year. He filed for regulatory approval in March and is among the most respected Asia-based managers.
The 13F filings were closely watched by observers trying to gain insight into the opaque world of hedge fund trading. Of course they have limitations. While they provide an overview of the funds' most bullish bets at quarter-end, they do not reflect trading during the quarter and do not account for most of the bearish bets.
Alpine and Segantii declined to comment. The other companies did not immediately respond to messages asking for comment.
Asia-based hedge funds typically invest the bulk of their capital outside of US exchanges, meaning their 13F filings capture only a small percentage of their investments. Higher disclosure thresholds in jurisdictions like Hong Kong, where a number of US-listed Chinese companies are now dual-listed, mean information is harder to come by. It is unclear whether the ADR trades were funds switching from ADRs to Hong Kong stocks or portions of hedged Hong Kong stock trades.
The most popular holdings added by these six Asian sellers during the quarter were Trip.com Group Ltd. Ariose, CoreView, Segantii, and Tairen more than tripled their combined Trip.com ADR holdings. U.S. shares of the Chinese online travel agency rose nearly 10% in the first quarter, continuing a 26% gain in the last three months of 2022 as Beijing announced it was easing Covid-era travel restrictions would. It has since fallen about 20% as investors worried about China's longer-term economic prospects.
CoreView and Segantii also added new positions in Baidu Inc. during the quarter as the company unveiled China's response to ChatGPT and a proposed $5 billion share buyback. It gave up some of its earlier gains when it was revealed that China would require security clearances of generative artificial intelligence services.
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