Billionaire Daniel Och Bullish on China and Tech Heading Into 2016

OZ Management is one of the world’s largest institutional alternative asset managers, with roughly $43.7 billion in assets under management as of February 1, 2016. The firm was founded by Daniel Och in 1994, with financial support from the Ziff family. The investment firm recently disclosed its long equity positions as of December 31, 2015 in a 13F filing with the SEC, revealing an equity portfolio valued at more than $18.31 billion. It should be noted that while its portfolio was valued at $28.71 billion at the end of the third quarter, the decline was driven by the liquidation of several large stakes. Over the fourth quarter, OZ Management’s 145 positions in companies with market caps above $1.0 billion delivered weighted average returns of 6.5%, based on the size of those positions at the beginning of the quarter. However, in 2015, the firm’s qualifying stock picks posted a weighted average returns loss of 3.2%. In this article, we’ll look at five of OZ Management’s biggest moves during its strong fourth quarter as it looks to carry that momentum into 2016.

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Qunar Cayman Islands Ltd (NASDAQ:QUNR)

– Shares Owned by OZ Management (as of December 31): 10.51 Million

– Value of Holding (as of December 31): $554.81 Million

Over the fourth quarter of 2015, OZ Management boosted its position in Qunar Cayman Islands Ltd (NASDAQ:QUNR) by 175%, taking its holding to more than 10.5 million shares valued at over half a billion dollars. This position made it the largest institutional investor of record in the company as of December 31, tailed by Andreas Halvorsen’s Viking Global, which declared holding 8.52 million shares as of the end of the fourth quarter. However, the big move by Och did not work out, as the stock has lost 27.7% since the beginning of 2016. While Viking Global took advantage of the declines to increase its stake to 25.56 million shares, becoming the largest shareholder of Qunar Cayman Islands Ltd (NASDAQ:QUNR), OZ Management did the opposite. On February 16, Mr. Och said his fund had closed out its position in the Chinese tech company.

Avago Technologies Ltd (NASDAQ:AVGO)

– Shares Owned by OZ Management (as of December 31): 3.55 Million

– Value of Holding (as of December 31): $516.02 Million

Avago Technologies Ltd (NASDAQ:AVGO) was also a recipient of bullishness from Mr. Och during the fourth quarter, as the money manager boosted his holding in the company by 17%. The company will report its first quarter of fiscal year 2016 financial results on Thursday, March 3, with the Street anticipating earnings of $2.30 per share, up by 10% year-over-year, on revenue of $1.76 billion, up by 7.4% year-over-year. Shares of Avago Technologies Ltd (NASDAQ:AVGO) are down by more than 11% year-to-date. Jim Davidson, Dave Roux and Glenn Hutchins’ Silver Lake Partners was also optimistic concerning Avago in the fourth quarter, opening a position comprising 13.76 million shares, worth almost $2 billion, over the October-to-December period.

On the next page we will take a look into three more bullish moves by OZ Management to close out 2015.

Bank of America Corp (NYSE:BAC)

– Shares Owned by OZ Management (as of December 31): 26.74 Million

– Value of Holding (as of December 31): $450.17 Million

Over the fourth quarter, OZ Management more than doubled its position in Bank of America Corp (NYSE:BAC), becoming one of the top five shareholders of the stock in our database. The largest stake was held by Ken Fisher’s Fisher Asset Management, which disclosed ownership of 43.09 million shares of the financial holding company as of December 31. Bank of America’s stock has tumbled by almost 28% year-to-date, driven by several elements including a revenue miss and job cuts. On Monday, Bank of America Corp (NYSE:BAC) announced it was rolling out a mortgage product that allows customers to put down as little as 3% instead of the usual 20%. The new product will also eliminate the Federal Housing Administration from the application process.

Alphabet Inc (NASDAQ:GOOG)

– Shares Owned by OZ Management (as of December 31): 589,000

– Value of Holding (as of December 31): $446.98 Million

Another interesting move found in OZ’s fourth quarter 13F was the initiation of a stake in Alphabet Inc (NASDAQ:GOOG), which accounted for more than 2.4% of its equity portfolio’s total value. One of the best performers in 2015, the company’s class C shares have lost 8.3% year-to-date. Late Monday, the Wall Street Journal reported that the tech giant was shutting down Google Compare, its comparison-shopping service for auto insurance, credit cards and mortgages. The stock was down by almost 1.5% in Tuesday trading.

Another fund betting on Alphabet Inc (NASDAQ:GOOG) long-term prospects was, once again, Viking Global, which declared holding 1.85 million class A shares as of the end of the fourth quarter. In fact, Alphabet was one of the most popular companies among the 700+ hedge funds that we track; 142 firms held its class C stock, while 154 held its class A shares on December 31.

Ctrip.com International, Ltd. (ADR) (NASDAQ:CTRP)

– Shares Owned by OZ Management (as of December 31): 7.93 Million

– Value of Holding (as of December 31): $367.77 Million

Finally, there’s Ctrip.com International, Ltd. (ADR) (NASDAQ:CTRP), which completed a 2-for-1 stock split in late December. In addition, OZ acquired about 7.65 million shares (or the pre-split equivalent) over the period, becoming the second-largest shareholder of the stock in our database, outranked only by Fisher Asset Management, which held 8.83 million shares. While the stock split initially helped boost the shares, year-to-date they have now lost 10.3%. Following this decline, CLSA upgraded its rating on the stock to ‘Buy’ from ‘Underperform’. Opposite to OZ Management, Viking Global said last week that it had trimmed its exposure to Ctrip.com International, Ltd. (ADR) (NASDAQ:CTRP) to 470,893 shares, from 3.76 million shares held at the end of December.

Disclosure: Javier Hasse holds no positions in any of the securities mentioned in this article.