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OZ Management quadruples its holdings in Qunar Cayman Islands Limited (QUNR) in anticipation of future growth

Daniel-Och-450x600By Pablo Erbar in Hedge Funds, From Insider Monkey

Daniel S. Och’s OZ Management recently increased its holdings in Qunar Cayman Islands Limited (NASDAQ:QUNR) by more than 4.55 million shares. This latest acquisition means the fund now holds over 6 million Class B Ordinary Shares, representing 5.39% of the company. By raising its exposure more than four-fold, OZ Management is clearly displaying a high level of confidence in the future performance of the China-based firm.

Founded in 1994 by Daniel S. Och, OZ Management is currently one of the biggest asset managers in the world, with an equity portfolio valued at over $34 billion. The fund employs a highly diversified approach, including investments in numerous industries and geographical locations. Services, basic materials, technology, and healthcare are the main industries the asset management firm is involved in, although they are by no means the only ones. Furthermore, OZ Management manages a wide array of investment vehicles, including multi-strategy funds and collateralized loan obligations. Despite being based in New York, the hedge fund has offices all around the world, including Mumbai, London, Hong Kong, and Beijing.

Qunar Cayman Islands Limited (NASDAQ:QUNR) is a $3.43 billion Chinese online travel operator. Through its commerce platform, the company connects travel service providers with customers throughout the People’s Republic of China, allowing travelers to find the best deals possible. Founded in 2005, the firm has grown at a rapid pace, thanks to its proprietary technology, which enables travel product information to be aggregated and processed in an organized manner. Qunar Cayman Islands Limited (NASDAQ:QUNR) is a subsidiary of Baidu Inc (NASDAQ:BIDU), which caught the attention of investors due to its extraordinary performance over the past year.

Hedge funds such as OZ Management are keen on adding Qunar Cayman Islands Limited to their portfolio, as the firm continues to expand its revenue streams. As of late, the mobile segment has been a major driver of growth, allowing the company to increase its operations significantly. Following its debut on the US Stock Market in November of 2013, shares of Qunar Cayman Islands Limited (NASDAQ:QUNR) jumped from an IPO price of $15 per share, to a current value of $27.65. Clearly OZ Management has recognized the company’s potential, acquiring enough stock in its latest transaction to reach the position of second largest institutional shareholder.

Although the Beijing-based travel operator closed the third quarter with a narrow loss, shareholders displayed optimism, as the short-fall was smaller than anticipated. Considering the Chinese online travel market still has great growth potential, it comes as no surprise that OZ Management is not the only hedge fund betting on Qunar Cayman Islands Limited. Paul Reeder and Edward Shapiro’s Par Capital Management is the company’s largest institutional shareholder, after it increased its stake in the firm to over 10.2 million shares this quarter. Last quarter, Robert Karr’s Joho Capital was also drawn to the Chinese firm, which now constitutes 4.74% of the fund’s portfolio.

Disclosure: Pablo Erbar holds no position in any stocks or funds mentioned.

IMAGE: Och-Ziff Capital Management

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