Daniel S. Och’s OZ Capital Management recently submitted a 13G filing revealing that the fund increased its holding in SouFun Holdings Ltd. (NYSE:SFUN) by 4.61 million American Depository Shares (ADSs) from its previously-revealed stake as of June 30. Hence, OZ Capital Management currently owns 14.90 million ADSs, which account for 5.09% of the company’s outstanding common stock. Each set of five ADSs are worth one share of the company’s common stock.
OZ Capital Management Group is a top-tier hedge fund management firm established by Daniel Och and the Ziff family in 1994. The investment firm is among the largest institutional alternative asset managers in the world, overseeing $46.5 billion in assets under management as of August 1, 2015. OZ Capital Management employs an event-oriented approach to multi-strategy investing and invests in a wide range of strategies including: merger arbitrage, long/short equity special situations, convertible and derivative arbitrage, and corporate credit, to name just a few. As stated by its latest 13F filing with the SEC, OZ Capital Management oversees a public equity portfolio worth $34.49 billion as of June 30.
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An everyday investor does not have the time or the required skill-set to carry out an in-depth analysis of equities and identify companies with the best future prospects like a fund with the knowledge and resources of OZ Capital Management can. However, it is also not a good idea to pay the egregiously high fees that investment firms charge for their stock picking expertise. Thus a retail investor is better off to monkey the most popular stock picks among hedge funds by him or herself. But not just any picks mind you. Our research has shown that a portfolio based on hedge funds’ top stock picks (which are invariably comprised entirely of large-cap companies) falls considerably short of a portfolio based on their best small-cap stock picks. The most popular large-cap stocks among hedge funds underperformed the market by an average of seven basis points per month in our back tests whereas the 15 most popular small-cap stock picks among hedge funds outperformed the market by nearly a percentage point per month over the same period between 1999 and 2012. Since officially launching our small-cap strategy in August 2012 it has performed just as predicted, beating the market by over 60 percentage points and returning 118%, while hedge funds themselves have collectively underperformed the market (read the details here).
SouFun Holdings Ltd. (NYSE:SFUN) operates a real estate internet portal in China. The company mainly offers marketing, e-commerce, listing, and other services for China’s real estate and other related sectors. The shares of SouFun are 21% in the red so far this year, partly owning to China’s economic slowdown. The recently-announced decision by the Chinese government to devalue its currency, which resulted in a sell-off in U.S-traded, China-based stocks, also put downward pressure on SouFun’s shares. In the meantime, Kerr Neilson’s Platinum Asset Management represents the largest shareholder in SouFun within our database, holding 12.51 million shares. At the same time, Rob Citrone’s Discovery Capital Management initiated an 8.32 million-share position in the company during the second quarter, making it one of the top equity holders of SouFun Holdings.
