What SA’s top hedge fund is betting on
South Africa’s largest hedge fund manager, 36ONE Asset Management, is banking on offshore stocks ranging from Chinese e-commerce to US luxury-goods makers for returns.
36ONE has kept close to its maximum offshore allocation in global mandates, which is equal to 25% of the total fund value, according to Jean Pierre Verster, who helps to manage R14bn as the fund manager.
One of 36ONE’s top offshore picks is Alibaba Group Holding Ltd. The Chinese e-commerce company, which listed on the New York Stock Exchange in September and closed at $68 (R790) per share on its f irst trading day, has a market capitalisation of $212.9bn (R2.5tr). This compares with Apple Inc.’s market value of $767bn (R8.9tr) and Microsoft Corp.’s $359bn (R4.2btr).
Alibaba, which derives the bulk of its internet-based sales from China, posted a 40% jump in revenue in the last three months of last year compared with the same period in 2013, according to its quarterly results. The group had 334m annual active buyers by the end of December compared with 231m by the end of 2013.
Having held Naspers* as one of the fund’s largest holdings for a number of years, the company has come to grips with the Chinese e-commerce industry, Verster explained. Naspers, which owns 33.6% of Hong Kong-listed Tencent Holdings, has been a consistent buyer of e-commerce businesses in emerging countries ranging from Poland to Brazil.
“We’re bullish about Alibaba’s business model of basically dominating e-commerce in China,” Verster said. “Their next