This Wednesday, John Horseman’s Horseman Capital Management filed its 13F Form with the U.S. Securities and Exchange Commission, disclosing its equity holdings as of the end of the fourth quarter of 2014. I will be taking a closer look at the three largest new positions held by the hedge fund, which include Alibaba Group Holding Ltd (NYSE:BABA), Bitauto Hldg Ltd (NYSE:BITA), and Infosys Ltd ADR (NYSE:INFY).
Horseman Capital Management was founded by John Horseman in 2000 as an investment company focused on providing money management expertise covering numerous equity strategies. The privately owned firm employs a small number of experts and has assets under management exceeding the $1.8 billion mark. Most of Horseman Capital Management’s equity portfolio consists of investments in companies with a market capitalization of $5 billion or more, along with some mid-cap firms. In addition to employing a top-down and disciplined approach to investing, the fund makes use of leverage, futures, and options to make its investments. Around 60% of the firm’s equity portfolio, which is valued at around $248 million, consists of finance equities, with companies belonging to the information technology sector accounting for around three fourths of the remaining 40%.
Although Horseman Capital Management’s top 10 holdings achieved returns above the 85% mark, the entire equity portfolio only managed to deliver a turnover of 42% during the fourth quarter. The fund’s top picks include Goldman Sachs Group Inc (NYSE:GS), Wells Fargo & Co (NYSE:WFC), and Bank of New York Mellon Corp (NYSE:BK) – the largest position in its portfolio. Furthermore, the firm closed its position in Comerica Incorporated (NYSE:CMA), which previously accounted for 6.8% of the total value of the equity portfolio.
One of the new positions disclosed by Horseman Capital Management was Alibaba Group Holding Ltd (NYSE:BABA). According to the 13F Form, the investment firm purchased 26,000 shares of the company for a total value of $2.7 million. Alibaba Group is a $241.1 billion market cap specialty retailer from the People’s Republic of China, which operates as an online and mobile commerce company. In addition to web-based shopping platforms, the firm provides pay-for-performance, display marketing services, real-time online advertising, and data management platforms. Recently Alibaba Group Holding Ltd (NYSE:BABA) announced an investment in AdChina, making it the majority shareholder in China’s largest digital advertising technology platform. Apart from Horseman Capital Management, Alibaba Group Holding Ltd (NYSE:BABA) is also backed by Andreas Halvorsen’s Viking Global. With a position of around 11.38 million shares, the hedge fund continues to be the company’s largest institutional shareholder.
As of the fourth quarter, Horseman Capital Management also has a stake of 30,600 shares of Bitauto Hldg Ltd (NYSE:BITA) stock, following a purchase valued at around $2.15 million. The $2.69 billion market cap technology firm generates Internet content and marketing services for the automotive industry in China. Its advertising services include new automobile pricing and promotional information, specifications, reviews, and consumer feedback to dealers and automakers. Furthermore, the company provides customer relationship management applications and Web-based integrated digital marketing to Chinese car dealers. Shares of Bitauto Hldg Ltd (NYSE:BITA) has plummeted as of late, largely due to the reported slowdown in automobile sales in China. The reduced share prices however, generated an interesting opportunity for those looking to buy stock for a more convenient price. Bitauto is also backed by Chase Coleman and Feroz Dewan’s Tiger Global Management LLC, which holds a position of 6.56 million shares, accounting for 6.78% of the fund’s equity portfolio.
The last new position acquired by Horseman Capital Management we would like to discuss here is Infosys Ltd ADR (NYSE:INFY). The fund purchased 32,000 shares of the company last quarter, which according to the 13F Form were valued at around $1 million at the time of the acquisition. Infosys is a $39.19 billion market cap firm specialized in providing business consulting, technology, engineering, and outsourcing services worldwide. The India-based IT company’s solutions include application development and maintenance, independent validation services, infrastructure management, business process management, and systems integration services among others. Apart from Horseman Capital Management, which has taken a bullish stance towards Infosys Ltd ADR (NYSE:INFY) with its latest purchase, the company has the backing of Ken Fisher’s Fisher Asset Management. The investment firm disclosed ownership of 2.94 million shares by the end of the third quarter, which would equate to 5.8 million shares following the 2:1 split of December 8th 2014.
Disclosure: Pablo Erbar holds no position in any stocks or funds mentioned.
