US funds tread carefully on China as Oaktree and Appaloosa recalibrate positions

Major US fund managers stayed cautious on China in the third quarter, with Oaktree Capital Management rebalancing its exposure to both equities and convertible bonds tied to Chinese firms, while Appaloosa – founded by billionaire investor David Tepper – made selective adjustments.

Oaktree Capital, founded by notable investor Howard Marks, sold all of its 1.5 million shares valued at US$26.8 million in KE Holdings, a Chinese online property platform, in the third quarter, according to its latest 13F filing with the US Securities and Exchange Commission.

It also pared back its exposure to several convertible bonds issued by Chinese firms. The fund exited its US$6.9 million position in convertible bonds issued by e-commerce giant Alibaba Group Holding, as well as a US$7.3 million stake in bonds from hotel chain operator H World Group. Alibaba owns the South China Morning Post.

By contrast, Oaktree Capital boosted its positions in online recruitment service provider Kanzhun by 72,300 shares, or 5 per cent, to US$38.4 million from US$28 million at the end of June.