The Hedge Funds That Took Advantage of China’s Strong 2025

At first of 2025, alarms have been blaring concerning the danger of investing in China.

A brand new protectionist administration was taking on within the US on the identical time China’s home actual property market was teetering. A attainable US ban on TikTok, the favored social media app, imperiled ByteDance, one of many nation’s greatest tech firms. American firms appeared to have surged forward of Chinese language rivals in synthetic intelligence improvement.

Twelve months later, and most of the greatest fears seem like overblown. The Chinese language authorities has centered on stimulating the economic system, main public firms to considerably improve their buybacks. ByteDance offered a majority stake in its US TikTok operations and is now extra worthwhile than ever, with HSG, the enterprise capital agency previously generally known as Sequoia China, valuing the corporate at between $350 billion and $370 billion not too long ago. And China’s AI scene, led by startup DeepSeek, is holding tempo with Western friends, and Nvidia will probably be permitted to promote its highly effective H200 chips to Chinese language firms, the US authorities mentioned Tuesday.

Hedge funds prepared to spend money on the nation final yr have been rewarded. Bridgewater, which manages $92 billion throughout all its methods, generated a 34.2% return in its China Whole Returns fund, an individual near the supervisor informed Enterprise Insider. Tekne Capital, managed by Beeneet Kothari, a onetime lieutenant of billionaire Stanley Druckenmiller, was up greater than 50% final yr, an individual near the supervisor mentioned.

Kothari’s $1.5 billion agency is an investor in Chinese language firms comparable to DiDi International, recruiting agency Kanzhun, and data-center builder GDS, the particular person mentioned. Kothari informed Enterprise Insider in an interview final yr that the headwinds dealing with the nation made sturdy firms very low-cost.

In accordance with HSBC’s Hedge Weekly report, funds primarily based in China and investing within the nation carried out properly. $3.4 billion Pinpoint’s China-focused technique returned greater than 24%, whereas its multistrategy offering, which invests throughout Asia, was up 11.6%. George Jiang’s long-running Golden China fund made near 33%, and Epimelis Capital, run by Hutchin Hill and Goldman Sachs veteran Fei Solar, made 35% in its China-centric technique.

The common China-focused fund was up near 18%, based on Hedge Fund Analysis, outpacing the trade common of 10.7%.

Going into 2026, traders will probably be watching how the risky relationship between the US and China evolves, particularly round commerce agreements related to chips, in addition to any indication that China would possibly invade Taiwan.

ByteDance can even catch the attention of funds — Tiger International and Coatue are each backers — because the social media large continues to develop.