Bloomberg Anywhere Remote Login Bloomberg Terminal Demo Request


Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world.


Financial Products

Enterprise Products


Customer Support

  • Americas

    +1 212 318 2000

  • Europe, Middle East, & Africa

    +44 20 7330 7500

  • Asia Pacific

    +65 6212 1000


Industry Products

Media Services

Follow Us

Bloomberg Customers

Ex-Soros Adviser’s Dalton China Fund Returns 25% This Year

Residential Development in Guangzhou
A man on a bicycle rides past cranes operating at a residential construction development in the Haizhu district of Guangzhou. Prices in the southern Chinese city of Guangzhou surged 21 percent from a year earlier, 20 percent in nearby Shenzhen, 18 percent in Shanghai and 16 percent in Beijing. Photographer: Brent Lewin/Bloomberg

The Dalton Greater China Fund, run by James Rosenwald III, a former adviser to funds linked to billionaire George Soros, beat peers with a 25 percent return this year, an investor newsletter seen by Bloomberg News showed.

The $64 million fund outperformed the Eurekahedge Greater China Long-Short Equities Hedge Fund Index by almost 10 percentage points in the first 10 months. Bets on Taiwanese technology companies including Himax Technologies Inc. and Hong Kong-based property developers drove performance, Tony Hsu, Rosenwald’s Shanghai-based co-manager, said in an e-mailed response to Bloomberg News queries.

Dalton Greater China Fund has focused on entrepreneur-led companies and against state-controlled enterprises, Hsu said. In a region with capital markets that sometimes fail to reflect its economic growth, Hong Kong-listed Chinese stocks, as measured by the Hang Seng China Enterprise Index, lagged the MSCI World Index in the three of the last five full years.

“We own a number of entrepreneurial-led companies where there is strong alignment of interests between the management and shareholders,” Hsu said in the e-mail. “At state-owned enterprises, the senior executives are placed into these management roles by the state and typically have no ownership in the companies they run.”

The Eurekahedge Greater China Long-Short Equities Hedge Fund Index underperformed the Singapore-based data provider’s global industry index in three out of the last five full years.

Profitable Trades

One of the fund’s most profitable trades this year was an investment in Himax, which designs chips for consumer electronics displays. Google Inc. agreed to buy a 6 percent stake in a unit of the Taiwanese company that makes liquid crystal on silicon chips and modules used in applications such as Google Glass.

Google Glass is a wearable computer that can take pictures and videos as well as share information via the Internet. It may be made available this year or next. The wearable technology market may jump about 14-fold to $19 billion in five years, according to a Juniper Research estimate.

Dalton began to buy Himax shares at about $1 in 2011, said Hsu, Dalton’s Shanghai office head who once worked for Foxconn International Holdings and Goldman Sachs Group Inc. Himax’s American depositary receipts hit a high of $11.02 on Oct. 2.

Developer Bets

Dalton is also betting on Hong Kong-listed property developers with prime assets in the largest Chinese cities yet trading at large discounts to their net asset value, according to Hsu. An example is CSI Properties Ltd., a Hong Kong developer with a number of assets in Shanghai that’s valued at less than 40 percent of its book value.

“First-tier cities will be major beneficiaries of the urbanization trends across China,” Hsu said, who declined to comment on performance because of compliance constraints.

New housing prices rose in October in all but one of the 70 Chinese cities tracked by the government, even after government measures such as raising down payment requirements to curb increases.

New home prices in China’s four major cities rose the most in October since January 2011, according to the National Bureau of Statistics. Prices in the southern Chinese city of Guangzhou surged 21 percent from a year earlier, 20 percent in nearby Shenzhen, 18 percent in Shanghai and 16 percent in Beijing.

The fund shorted state-owned developers which traded at higher valuations, he added. Shorting involves selling borrowed shares and making a profit buying them back when prices decline.

Dalton Investments LLC, based in Santa Monica, California, oversaw $2.6 billion of assets by Nov. 1, according to the October newsletter. Of that, $1.4 billion are Asian equity assets managed by Rosenwald in various funds and accounts.

Rosenwald and former classmate Steve Persky set up Dalton in 1999. Dalton also invests in global stocks, distressed debt and distressed mortgages, according to its website. Between 1992 and 1998, he advised “numerous” Soros funds, his Dalton biography states.

Please upgrade your Browser

Your browser is out-of-date. Please download one of these excellent browsers:

Chrome, Firefox, Safari, Opera or Internet Explorer.