Azentus Capital Management is one of Hong Kong’s largest hedge funds. Managed by Morgan Sze, the fund had the best returns since inception in 2013. According to Bloomberg, Azentus’s Asia-focused global multistrategy fund gained 16.4% last year, still underperforming the S&P 500 index, which returned 31.8%. For the second quarter of 2014, the fund disclosed an equity portfolio worth more than $184 million, up from $130 million in the first quarter. The portfolio includes 12 stocks, from four different sectors. In this article, however, we will look into three of the fund’s largest stakes: Micron Technology Inc (NASDAQ:MU), Twenty-First Century Fox Inc (NASDAQ:FOX) and 21Vianet Group Inc (NASDAQ:VNET).
Last quarter, Mr. Sze placed his largest bet on Micron Technology Inc (NASDAQ:MU), which displaced Twenty-First Century Fox Inc (NASDAQ:FOX). The $34.71 billion market cap semiconductor manufacturer saw the fund boost its exposure by 52% over the quarter, to 1.08 million shares of Common Stock, worth more $35 million.
Seth Klarman’s Baupost Group is the largest hedge fund shareholder (amongst those we track) at Micron Technology Inc (NASDAQ:MU), holding 51.65 million shares of the company, worth more than $1.7 billion. Other major hedge funds betting on the company are David Einhorn’s Greenlight Capital and Andreas Halvorsen’s Viking Global, which own 40.34 million shares and 17.69 million shares, respectively.
The stock returned 49% year-to-date, and 55% over the second quarter, so many funds saw it as a chance to make money by selling some of their stock. However, Azentus’ case was the opposite. The fund is probably betting on further (long-term) growth, mainly fueled by the adoption of solid-state drives. Currently trading around average valuations (at 10.6 times the company’s earnings), Micron Technology Inc (NASDAQ:MU) still looks attractive.
Second in line is Twenty-First Century Fox Inc (NASDAQ:FOX), a $75.69 billion market cap diversified media and entertainment company. After trimming its stake by 9% over the second quarter, Azentus disclosed ownership of 650,820 shares Class B stock, worth more than $22 million.
Another fund with massive stakes in the company is Donald Yacktman’s Yacktman Asset Management, which last declared ownership of 44.22 million Class A shares, worth more than $1.55 billion, and 18.7 million Class B shares, worth another $640.18 million.
Between April 1 and June 30, inclusive, Twenty-First Century Fox Inc (NASDAQ:FOX)’s Class B stock returned 11.4%, but lost about 2% year-to-date. The stock plummeted during July and early-August, as the merger with Time Warner Inc (NYSE:TWX) died. However, the stock recuperated in August, after the company announced better-than-expected fourth quarter results.
Last in Azentus’ list is 21Vianet Group Inc (NASDAQ:VNET), a $1.33 billion market cap Chinese carrier-neutral Internet data center service provider. Following a 15% decrease in its stake in the company, the fund owns 601,065 shares, worth more than $18 million.
The largest hedge fund shareholder at 21Vianet Group Inc (NASDAQ:VNET), Ted Kang’s Kylin Management, also reduced its exposure to the company, by 3%. It now holds 2.72 million shares of the company.
The stock had returned more than 28% in the first six months of 2014. However, since the begging of September, it lost more than 26%, mainly in account of fraud allegations. The company was accused of manipulating SEC financial statements and conducting other illegal activities in China.
Disclosure: Javier Hasse holds no positions in any stocks or funds mentioned
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