Alibaba Group Holding’s finance affiliate has acquired a 20% stake in Shanghai Suntime Information Technology Co, a data provider tracking Chinese hedge funds, according to people with knowledge of the matter.
Zhejiang Ant Small & Micro Financial Services Group paid 250mn yuan ($38mn) in cash for the stake earlier this week, said the people, who asked not to be named because the deal hasn’t been publicly disclosed. Ant Financial, as the company is known, becomes the largest owner of Shanghai Suntime after the closely held data provider’s Chairman Liao Bing, according to one of the people.
Ant Financial is controlled by billionaire Alibaba founder Jack Ma, who has been building his media and financial information empire. The financial affiliate, which controls the company that manages China’s largest money-market fund Yu’E Bao, is in talks to invest in Chinese business magazine publisher Caixin Media Co. Alibaba bought Hong Kong’s South China Morning Post and last year also formed a joint venture with Shanghai Media Group Inc to create a financial data and information service.
With the latest acquisition, Ant Financial is tapping the potential of the nation’s rapidly-growing hedge fund industry as more wealthy Chinese turn to private managers. Shanghai Suntime, founded in 2003 by Liao, runs one of the biggest databases tracking Chinese hedge funds, provides profit forecasts for listed companies and offers wealth-management services.
The number of private securities funds, the Chinese equivalent of hedge funds, jumped more than 140% from a year earlier to 18,297 as of May 31, and assets under management almost doubled to 2.2tn yuan during that period, according to the Asset Management Association of China.
Ant Financial, which is said to be valued at around $60bn after raising $4.5bn earlier this year, has evolved from an outsider in a tightly controlled industry to an online giant now working with the largest state-run entities, including China’s sovereign wealth fund and the nation’s second- largest bank. The firm also runs China’s biggest online payment service, Alipay, with 450mn users.