North American Public Pensions Dumped Alibaba Group Stock

Posted on 05/24/2021

Alibaba Group Holding Limited (ticker: BABA) was a darling direct listed equity holding for many large U.S. and Canadian public pensions. Alibaba was the largest Chinese equity holding for many U.S. pensions in 2020. However, shares of Alibaba have lost approximately a third of their value since last fall as Chinese regulatory pressure intensified. Many institutional investors ignored Trump’s trade war with China when it came to Chinese stocks, but were concerned about how the Chinese government dealt with tech companies in mainland China. The surprise nixing of the public offering of Ant Group (formerly Ant Financial) shocked public funds. Alibaba owns around a third of Ant Group. Profit and revenue for the quarter for Alibaba will be less of an issue versus outstanding and possibly future regulatory issues that need resolution.

Canada Pension Plan Investment Board (CPP Investments) had large exposure to both Ant Group and Alibaba Group. CPP Investments, in the final quarter of 2020, dumped 4,990,325 shares in Alibaba, bringing its 2020 year-end position to 10,929,207 shares. The position at the time was US$ 1.1614 billion. CPP Investments then lowered their position in Alibaba in the first quarter of 2021, now holding around 6,377,000 shares. SEC records for CPP Investments differ slightly; lowering Alibaba exposure by 1,995,021 shares, or about an estimated position worth US$ 452.331 million. Tencent Holdings Limited remains the largest mainland China listed equity holding for CPP Investments at 40,119,000 shares worth around C$ 3.956 billion at the time.

In the first quarter of 2021, a number of sizeable North American public funds dropped major positions in Alibaba Group. The California Public Employees Retirement System (CalPERS) sold down 4,103,803 shares to about 251,815 shares, or about a US$ 930 million position in the company.

In the first quarter of 2021, Temasek Holdings shaved off 110,180 shares of Alibaba, or around a US$ 24.981 million position.

Not all public funds are bearish on Alibaba. Norges Bank Investment Management (NBIM), which oversees Norway Government Pension Fund Global, holds 24,548,114 shares of Alibaba, according to recent filing data.

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