One of China’s most famous hedge funds is springing back to life

Star fund manager appears to be chasing China stocks rebound.
Image: Bloomberg

A sudden rise in the volatility of funds run by one of China’s best-known money managers suggests the firm may be rebuilding positions in the stock market after liquidating nearly all its holdings earlier this year.
Weekly net asset values at several funds managed by Dan Bin’s Shenzhen Oriental Harbor Investment Management Co. began showing more dramatic swings last Friday, after being little changed since late February. The increase in volatility is an indication of rising market exposure.

The reemergence of Dan’s funds from near dormancy echoes a broader reawakening of trading interest in the world’s second-largest stock market, as it outperforms global peers for a third week. The fear of missing out is returning among Chinese investors, prompting them to raise bets on support from Beijing’s all-out effort to rescue a faltering economy.

The Marathon No. 16 fund, one of the products managed by Dan’s firm, recorded a 3.2% drop in net value last week after reporting fluctuations of less than 1% for 13 straight weeks, according to data provider Shenzhen PaiPaiWang Investment & Management Co. The benchmark CSI 300 Index was up 3.7% last week.

“It is normal for products to see adjustments to positioning,” said a spokeswoman of Oriental Harbor, when asked to confirm if the firm’s funds have been rebuilding stock portfolios. She declined to elaborate.

Dan is among the nation’s earliest private asset managers — the Chinese equivalent of hedge funds –authoring numerous books on investing and keeping a highly active profile on social media with nearly 13 million followers. On March 25, Dan confirmed via China’s twitter-like Weibo platform that his company had cut equities exposure to near zero, citing risks induced by the war in Ukraine.

The CSI 300 index has jumped 13% from an April low, while the Nasdaq-style ChiNext board has recently entered a technical bull market. The gains have come as Beijing has reopened the credit spigot and the world’s No. 2 economy started showing some signs of recovery last month.

© 2022 Bloomberg

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