Hedge funds can’t get enough of JD.com Inc. Tiger cubs including Lone Pine Capital, so-named because their founders worked for billionaire Julian Robertson’s Tiger Management, helped lead a rush into the Chinese online retailer’s American depositary shares in the first quarter.
Hedge funds hold a record 44 percent, based on publicly disclosed holdings. That’s more than they own in any of the 217 other U.S.-listed companies valued at more than $25 billion, Bloomberg reported.
The hedge funds, which also include Carlyle Group LP’s Emerging Sovereign Group, are piling into a company that’s benefiting from surging online shopping in the world’s second-largest economy. Investors are betting a burgeoning middle class and growing Internet user base will help extend the 78 percent rally since JD.com’s initial public offering a year ago.
“People have taken a look at this company, some great funds, and they like what they see,” Dan David, co-founder of Skippack, Pennsylvania-based research firm Geoinvesting, said by phone on Monday. “Hedge funds tend to do a lot more diligence on the companies they invest in than a mutual fund or any other kind of fund. They have a vested interest to take a much closer look on the ground. They see value there.”
Hedge funds own about 12 percent of Chinese rival Alibaba Group Holding Ltd., which has dropped 7.2 percent since its September IPO, and 5.1 percent of Apple Inc., according to data compiled by Bloomberg. The 32 percent stake they own in Allentown, Pennsylvania-based Air Products & Chemicals Inc. is the largest after Beijing-based JD.com.
Lone Pine, the $29 billion hedge fund run by Stephen Mandel, and one of the largest Tiger cubs, added almost 30 million shares of JD.com last quarter, bringing its total stake to $1.1 billion through March 31. Tiger Global Management, the investment firm run by Chase Coleman, quadrupled its stake in the company by the end of the quarter to $615 million, according to its most recent 13F filing.
Other cubs that bought JD.com, which has a market value of about $47 billion, include Coatue Management and Fox Point Capital Management, while Robertson’s Tiger Management added more than 427,000 shares.
Emerging Sovereign Group, the Carlyle Group unit founded in 2002 with seed capital from Robertson, bought 12.7 million shares in the period, valued at $374 million, filing data show.
