Carlyle, Maverick Among Alts. Firms Burned By Western-Listed Chinese Cos.

Jun 9 2011 | 1:04pm ET

Paulson & Co. may be the biggest loser, but it's not the only loser among alternative investments firms with big stakes in Chinese companies listed on Western exchanges.

Paulson's travails are by now well known: The hedge fund giant is facing hundreds of millions of dollars in losses after a short-seller accused Toronto-listed Sino-Forest Corp. of lying about its timber holdings in China. Sino-Forest shares, of which Paulson owns 14%, have dropped 69% in less than a week; Paulson said it will investigate the allegations against the company.

But Paulson's got company as a hedge fund burned by Chinese companies listed abroad. The Carlyle Group owns a 22% stake in organic fertilizer maker China Agritech, which has seen its shares sink 38% over the past 12 months, The Wall Street Journal reports. Software company Longtop Financial Technologies boasts Maverick Capital and Tiger Global Management as major shareholders, with 9.8% and 4.6% stakes, respectively. It has also lost 36% over the past 12 months.

AQR Capital Management, Citadel Investment Group, Oaktree Capital Management and Renaissance Technologies are also major investors in Chinese companies listed in the West that have reported possible accounting errors, fraud, auditor changes or regulatory investigations over the past six months.


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