Billionaire Hedge Fund Manager David Tepper Plans to Acquire ‘Everything’ Related to China

Billionaire investor David Tepper has announced his intention to increase his investments in various Chinese assets following the unexpected introduction of robust stimulus measures by the Chinese government to support the nation’s slowing economy.

Tepper, the founder of Appaloosa Management since 1993, highlighted that his strategy is influenced by the recent policy shifts in China. In a CNBC interview, he noted, “I thought that what the Fed did last week would lead to China easing, and I didn’t know that they were going to bring out the big guns like they did.”

During the second quarter, Tepper’s hedge fund retained most of its positions in Chinese companies while reducing stakes in major U.S. tech firms. With China now committing to more fiscal support and taking steps to stabilize its property market, Tepper is choosing to increase his investments in Chinese stocks, including tech giants.

He stated, “We got a little bit longer, more Chinese stocks,” and cited the appealing low valuations as a reason for this decision, despite the recent uptick in prices.

This shift in sentiment comes as China’s onshore equity benchmark experienced a 14% surge this week, marking its largest weekly increase since the global financial crisis. Additionally, a gauge tracking U.S.-listed Chinese stocks also saw a rally of 19% during the same timeframe.

Prior to this week’s rise, Tepper, alongside Michael Burry of Scion Asset Management, had been among the few prominent hedge fund investors expressing optimism about Chinese stocks. Tepper also indicated that he has eased some of his previously set limits on investments in Chinese equities, suggesting that he may no longer adhere strictly to the historical cap of 10% to 15%. However, he mentioned that he would likely establish a new limit should the market experience a downturn.

Tepper is not the only investor adopting a positive outlook on China. Nick Wilcox of Man Group anticipates that Chinese stocks will continue their upward trend, buoyed by ongoing policy support, improved earnings, and the Federal Reserve’s recent easing, which may provide more room for China to cut interest rates. Furthermore, reports indicate hedge funds are showing an increased interest in buying Chinese equities, with strategists predicting potential additional gains for the CSI 300 Index in the near future.