What SA’s top hedge fund is bet­ting on

Finweek English Edition - - FRONT PAGE - BY JACO VISSER

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

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