Tybourne, Myriad Among Largest Hedge-Fund Buyers of Alibaba

  • Tybourne bought 5 million Alibaba ADRs in third quarter
  • Myriad added 1 million ADRs in the Chinese e-commerce giant

Tybourne Capital Managment (HK) and Myriad Asset Management were among the largest hedge-fund buyers of Alibaba Group Holding Ltd. shares in the third quarter, before the Chinese e-commerce giant rallied more than 30 percent.

Tybourne, founded by a former Asia head of Lone Pine Capital in Hong Kong, purchased 5 million American depository receipts, the single-largest hedge-fund buyer in the three months ended Sept. 30, according to data compiled by Bloomberg from regulatory filings. Myriad, also based in Hong Kong and led by a former regional head of Highbridge Capital Management, added more than 1 million Alibaba ADRs, bringing its stake to 1.5 million shares.

Tybourne and Myriad ranked among the top four hedge-fund buyers of Alibaba ADRs along larger global peers Och-Ziff Capital Management Group LLC and DE Shaw Investments in the third quarter. Alibaba ADRs slumped 28 percent in the quarter as trading restrictions introduced upon its $25 billion initial public offering in September last year drew to an end, freeing some of its largest stakeholders to sell shares. Asset managers including Coatue Management and Appaloosa Management sold their stakes, according to data compiled by Bloomberg.

Spokespeople for Tybourne and Myriad declined to comment. Tybourne, with Eashwar Krishnan at the helm, manages $3.7 billion in assets, including a $2.5 billion hedge fund that bets on rising and falling stocks, and a long-only fund. Myriad, led by Carl Huttenlocher, oversees more than $4 billion in hedge funds.

Shares Drop

Alibaba shares lost as much as 45 percent of their value this year as the Hangzhou-based company came under fire from a Chinese government agency over the handling of fake goods, cut deals that baffled investors and replaced its chief executive officer after growth slowed. Investors were also concerned about China’s weakest economic expansion in 25 years weighing on the company’s outlook. The stock traded at a low of 23 times this year’s earnings on Sept. 30, against a multiple of almost 51 times on Nov. 30, 2014, according to data compiled by Bloomberg.

Alibaba ADRs traded at an average price of $72.86 apiece in the three months ended September.

Myriad was a pre-IPO investor in Alibaba’s 2012 sale of convertible preferred shares. The investment helped drive a 20 percent return for its flagship hedge fund in 2014. It sold more than 90 percent of its holding of Alibaba ADRs in the fourth quarter of 2014.

Tybourne, which also held shares in global technology stocks such as Amazon.com Inc., Yelp Inc., had not previously disclosed any Alibaba stake. Alibaba represented its second-largest holding of U.S.-traded securities that it was required to disclose in the so-called quarterly 13F filings at the end of September. Tybourne’s hedge fund returned 3.5 percent in October for a 17 percent gain this year, said a person with knowledge of the matter, who asked not to be named as the information is private.

Among investors that reduced Alibaba holdings in the third quarter were Singapore state-owned investment firm Temasek Holdings Pte and its Seatown Holdings International hedge-fund unit. Stephen Forshaw, a spokesman for Temasek, confirmed the filing while declining to comment further. Seatown declined to comment for the story.

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