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Magellan Fund Sells Tencent on Crackdown, Adds Amazon Instead

Published 01-09-2021, 02:48 pm
© Reuters.

(Bloomberg) -- An equity fund run by Magellan Financial Group Ltd., one of Australia’s biggest investment managers, sold its shares in Tencent Holdings (OTC:TCEHY) Ltd. in early August in response to China’s regulatory crackdowns and “made the switch” to a new position in Amazon.com Inc (NASDAQ:AMZN).

Tencent’s “large and important gaming, social media and other content businesses are exposed to regulatory, social and political tail risks that we cannot handicap,” said Chris Wheldon, who co-manages the Magellan High Conviction Fund. 

Some assets were shifted to a stake in Amazon after the Seattle-based company’s shares dropped in the wake of its second-quarter results, he said in a webinar Wednesday. 

Amazon’s price fall “coincided with a change in our risk-adjusted views regarding the Tencent investment case,” he said. The U.S. e-commerce and cloud-computing firm is “right in the center of the dartboard in terms of business quality and long-term compounding potential,” Wheldon said, adding that the fund previously “had a question mark next to its valuation.”

Magellan oversees A$117 billion ($85.6 billion) in global equity and infrastructure strategies, according to its website. Its Tencent stake was in Hong-Kong listed shares of the Chinese tech giant.



©2021 Bloomberg L.P.


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