New Hedge Fund Bets Worst Is Over For U.S.-Listed Chinese Cos.

Jun 25 2013 | 10:24am ET

An old China hand is set to launch a hedge fund investing in Chinese companies listed in the U.S.

Paul Conway is seeking about US$60 million for his China Revaluation U.S. Fund. His thesis is simple: China bears like Muddy Waters' Carson Block have already taken out most of the allegedly fraudulent Chinese firms listed in North America, leaving behind about 150 strong—and undervalued—businesses.

"I have seen everything: the good, bad and ugly of China," Conway told Reuters. "And I am still extremely encouraged."

From 2010 through last year, some 70 Chinese companies trading on U.S. markets were hit with class-action lawsuits, seeing their market-capitalizations plummet by US$26.5 billion. And that doesn't include the most spectacular Western-listed Chinese implosion, that of Sino Forest Corp., whose shares cratered after Block accused the firm of overstating its timber holdings in China. Sino Forest, which was listed in Canada, cost hedge fund Paulson & Co., once one of its largest shareholders, hundreds of millions of dollars.

In addition, a new agreement between the U.S. and China will give regulators access to Chinese companies' audit documents.

"A lot of companies went public that shouldn't have," Conway said.

The new fund, managed by Fidelity Investments veteran Paul Jackson, will invest in between 15 and 20 stocks. Conway, a former Oppenheimer & Co. banker who does not speak Mandarin, has also brought on Chien Lee, co-founder of China's 7 Days Group Holdings hotel chain; Paul Keung, another Oppenheimer veteran; and Eddie Woo of Mascotte Holdings. The latter two will serve on China Revaluation's advisory board.


In Depth

Why Ponzi Schemes Work: An In-Depth Look At The Allen Stanford Fraud

Dec 21 2014 | 10:30am ET

Texan Allen Stanford first appeared on the radars of financial regulators in 1997...

Lifestyle

Hedgie Funds US Squash Program

Dec 24 2014 | 8:46am ET

Squash, anyone?

Guest Contributor

EidoSearch’s Top Three Market Projections For 2015

Dec 23 2014 | 4:03am ET

It is that time of year again when prognosticators make their big market calls for...

 

Sponsored Content

Editor's Note

    Guidelines for Guest Articles

    Oct 22 2014 | 9:46am ET

    We are always looking for guest articles from hedge fund managers and buy-side firms.

    If you are interested in submitting a contributed piece for possible publication on FINalternatives, please take a look at the specs. Read more…

 

Futures Magazine

December 2014 Cover

Futures 2014 person of the year

Jeff Sprecher was simply looking for a platform to trade energies when launching ICE 14 years ago but it has grown to reach the pinnacle of both the listed futures and equities world.

The Alpha Pages

TAP July/August 2014 Cover

The Alpha Pages Interview: Senator Rand Paul

Senator Paul sat down in the debut series of the Alpha Pages Interview to discuss the broken tax code, regulation surrounding Bitcoin, and his plans for the 2016 Presidential election.