Soros Joined by D1, Soroban in Timely Exit of Chinese Stakes
(Bloomberg) -- More funds joined George Soros’s investment firm in lightening their exposure to U.S.-listed Chinese companies in the second quarter, dodging a selloff prompted by a state crackdown on everything from ride-hailing to education companies.
D1 Capital Partners, the investment firm run by Dan Sundheim, sold its 25 million shares in New Oriental Education & Technology Group Inc., while Soroban Capital Partners, the hedge fund firm co-founded by Eric Mandelblatt, exited its 2.06-million-share stake in Alibaba Group Holding Ltd., according to filings with the U.S. Securities and Exchange Commission.
The filings show that some funds managed to sidestep, at least in part, the ugly July for Chinese stocks in the U.S. The Nasdaq Golden Dragon China Index, which tracks 98 such companies, plunged 22% last month.
Soros Fund Management exited many of its investments in American depositary receipts of Chinese companies including Baidu Inc., Vipshop Holdings Ltd., Tencent Music Entertainment Group and IQiyi Inc., positions it snapped up during the collapse of Archegos Capital Management in March and April.
Chinese tech stocks have seen a renewed selloff in August as Beijing took further steps to tighten its grip on the nation’s internet giants. The Hang Seng Tech Index dropped as much as 3.7% Tuesday, its fifth straight decline, after China’s market regulator issued draft rules banning unfair competition among the nation’s online platform operators. SEC Chair Gary Gensler also issued his most direct warning yet about the risks of investing in Chinese companies.
In U.S. premarket trading, Baidu ADRs sank 3.8%, New Oriental dropped 5.3% and TAL Education Group declined 5.6%.
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