Dinakar Singh, founder of $4 billion hedge fund TPG-Axon Capital Management LP, said the commodities “super-cycle” is over because of falling Chinese productivity and profits.
“It’s not where it was 10 years ago,” Singh said today in an interview on Bloomberg Television’s “Market Makers” program with Erik Schatzker and Stephanie Ruhle. “They are slowing down in their growth.”
Price multiples of Chinese companies have collapsed and investors don’t trust the private firms based there, he said.
Singh, a former Goldman Sachs Group Inc. partner who co-founded New York-based TPG Axon in 2004, said profits are improving the most in Japan, where companies with cheap stock valuations are paying out cash and growing. He said he also sees growth in the chemical, health-care and aerospace industries and likes cash-rich companies such as Sirius XM Radio Inc. and WR Grace & Co.
Singh said he is bearish on regional banks and is betting against telecommunications stocks.
TPG-Axon returned about 13 percent this year through yesterday, according to a person with knowledge of the matter, who asked not to be identified because the fund is private. Hedge funds rose 1.1 percent in the first half, according to data compiled by Bloomberg.
TPG-Axon Capital told clients in February it was liquidating a London-based fund, Montrica Global Opportunities, it merged with less than two years ago after facing client redemption requests.