Hillhouse Capital Group is an investment fund founded by Chinese businessman Zhang Lei in 2005 with $20 million in seed capital from the Yale Endowment. The fund manages over $3.97 billion worth of equity portfolio, as of the end of the second quarter. It reported an eye-catching return of 17.97% in the third quarter from its 22 holdings in companies.
Albeit investors are not happy with hedge funds lately due to high fees, low returns and scandals, Insider Monkey’s research establishes that mimicking hedge funds for their long side of portfolio actually works, and could help in beating the market. In the third quarter, out of nearly 660 funds tracked by Insider Monkey, 627 posted positive returns from their holdings in companies whose market worth stood at a minimum of $1 billion.
Hillhouse Capital’s returns in the third quarter were also due to its long bets in mostly China-based companies. Let’s see the details of some of these top picks.
Hillhouse Capital Management retained its gigantic position in JD.Com Inc (ADR) (NASDAQ:JD) in the second quarter, having a total of over 123.21 million shares of the company valued at $2.61 billion. The stock returned 22.9% during the third quarter. At the end of the second quarter, a total of 51 of the hedge funds tracked by Insider Monkey were long this stock, down by 30% from one quarter earlier. Trailing Hillhouse Capital Management, which was the largest shareholder, was Tiger Global Management LLC, which amassed a stake valued at $934.2 million. Orbis Investment Management, Viking Global, and Coatue Management also held valuable positions in the company.
At the end of the June quarter, Hillhouse Capital Management had owned about 8.1 million shares of Ctrip.com International, Ltd. (ADR) (NASDAQ:CTRP). The overall worth of this stake was about $333.4 million. The stock appreciated by 13% during the third quarter. Ctrip.com International, Ltd. (ADR) (NASDAQ:CTRP) was in 43 hedge funds’ equity portfolios at the end of the second quarter of 2016, down from 67 funds a quarter earlier. More specifically, Fisher Asset Management was the largest shareholder of Ctrip.com International, Ltd. (ADR) (NASDAQ:CTRP), with a stake worth $410.1 million reported as of the end of June. Viking Global, Tourbillon Capital Partners, and OZ Management also held valuable positions in the company.