Despite the bull market for Chinese concept stocks this year, major hedge funds in the U.S. adopted differentiated allocation strategies in the third quarter. According to the latest 13F filings, several well-known fund management institutions have rebalanced their investments in Chinese concept stocks.
Oaktree Capital made a comprehensive adjustment to its exposure to Chinese equity and convertible bonds in the third quarter, completely liquidating its position in KE (Beike). Billionaire investor David Tepper's Appaloosa Fund took a more refined reallocation strategy, increasing its holdings in Baidu while moderately reducing its core positions in Alibaba. The world's largest hedge fund, Bridgewater Associates, has completely steered clear of investments in Chinese concept stocks since the second quarter, maintaining a zero exposure in the third quarter.
<h2>Oaktree Capital Significantly Restructures Chinese Concept Investment Portfolio</h2>
Oaktree Capital, founded by Howard Marks, made significant adjustments to its Chinese concept stock portfolio in the third quarter. According to the latest 13F filings from the U.S. Securities and Exchange Commission, the fund liquidated all 1.5 million shares of KE (Beike) valued at $26.8 million.
In terms of convertible bond investments, Oaktree Capital exited its position in Alibaba Group's convertible bonds valued at $6.9 million, as well as its investment in Huazhu Group's bonds valued at $7.3 million.
However, Oaktree Capital also selectively increased its exposure to certain Chinese concept stocks. The fund increased its holdings in BOSS Zhipin by 72,300 shares, a 5% increase, raising the position's value from $28 million at the end of June to $38.4 million.
In terms of convertible bonds, Oaktree Capital significantly increased its holdings in Li Auto's convertible bonds by 121%, JD.com's convertible bonds by 93%, and Trip.com's convertible bonds by 6%.
<h2>David Tepper's Strategic Reallocation but Maintains Heavy Holdings</h2>
Appaloosa Fund also adopted a refined reallocation strategy in the third quarter. The fund significantly increased its holdings in Baidu by 420,000 shares to 1 million shares, raising the position's market value from $53.6 million in the previous quarter to $137.7 million.
At the same time, Appaloosa liquidated all its holdings in KE (Beike) valued at $26.6 million and reduced its position in Alibaba by approximately 617,000 shares, a decrease of 9%, but still maintains a large position valued at $1.15 billion. The fund also reduced its holdings in Pinduoduo and JD.com by 10% and 11%, respectively.
These reallocations reflect Tepper's recalibration of exposure to China, showing a moderate adjustment in commitment to Chinese assets. Notably, according to an article from Wall Street Insight, billionaire hedge fund founder David Tepper once exclaimed in September last year, “Buy everything Chinese assets.”
<h2>Bridgewater Associates Completely Withdraws from Chinese Concept Stock Market</h2>
Bridgewater Associates continued to maintain a zero exposure strategy to Chinese concept stocks in the third quarter, extending its complete avoidance stance towards U.S.-listed Chinese concept stocks since the second quarter
The fund liquidated a $1.4 billion portfolio of Chinese concept stocks in the second quarter, including core holdings such as Alibaba, JD.com, Baidu, Nio, and Yum China.
The sell-off also included companies like TAL Education Group, Huazhu Group, KE, and Autohome, marking Bridgewater's first complete exit from U.S. Chinese concept stock investments in years

BIDU

09888

BABA

09988

BEKE

02423

The 13F filing shows that Oak Tree Capital completely liquidated its positions in KE, Alibaba, and Huazhu convertible bonds in Q3, but increased its holdings in BOSS Zhipin, Li Auto, and JD.com convertible bonds. David Tepper significantly increased his position in Baidu to USD 137.7 million, completely liquidated KE, and slightly reduced his position in Alibaba but still holds a substantial USD 1.15 billion. Bridgewater Associates continued its strategy from the second quarter, maintaining zero exposure to Chinese concept stocks

- Despite a bullish market for Chinese concept stocks this year, major U.S. hedge funds adopted differentiated strategies in Q3.  
- Oak Tree Capital significantly restructured its Chinese stock portfolio, completely liquidating its position in Beike, while Appaloosa Fund increased its stake in Baidu and reduced holdings in Alibaba.  
- Bridgewater Associates maintained a zero exposure to Chinese stocks, continuing its avoidance strategy established in Q2, having previously liquidated a $1.4 billion portfolio of key Chinese companies.

Wallstreetcn

Baidu

BIDU-SW

Alibaba

BABA-W

BEKE-W

How do hedge funds view Chinese concept stocks in Q3? Oak Tree Capital adjusts its positions, David Tepper "slightly reduces his holdings" but remains heavily invested, while Bridgewater has already distanced itself