Hedge Fund Triata Soars 39% Amid AI and Robotics Surge!

(Bloomberg) — A significant rally in Chinese stocks, fueled by excitement surrounding DeepSeek and Unitree Robotics, has led to impressive returns for several hedge and long-only funds last month. The unveiling of DeepSeek’s lower-cost, open-source artificial intelligence model, alongside Unitree’s showcase of cutting-edge robotics technology, has captured the imagination of investors. The MSCI China Index surged nearly 12% in February and has continued its upward trajectory this month with an additional 3% increase, primarily driven by stocks poised to benefit from the broader adoption of these innovative technologies.

Market Insights: A New Era for Chinese Equities

“Chinese equities may see a re-rating this year,” stated Zheng Fang, founder of Hong Kong-based Keywise Capital Management Ltd. “The advancements from DeepSeek and Unitree have prompted a re-evaluation of China’s technology development.” This optimistic outlook is reflected in the performance of Triata Capital Ltd.’s China hedge fund, which achieved a remarkable 39% return during the month, bolstered by strategic investments in AI software and data center stocks, according to a source familiar with the matter.

Triata’s Strategic Investments in AI and Data Centers

Chief Investment Officer Sean Ho, who began his career at the global quant trading firm Susquehanna International Group, has been instrumental in shaping Triata’s investment strategy. Ho previously developed the initial alternative data system at Hong Kong-based asset manager Tybourne Capital Management before launching his own firm. Utilizing alternative data, including insights from company hiring activities, Triata began acquiring American depositary receipts of data center operator GDS Holdings Ltd. in the first quarter of 2024, when shares were trading between $5 and $6.

According to the source, the firm has chosen not to comment publicly on its investment strategies. The sale of a minority stake last year valued GDS’s international business at approximately $3.86 per ADR, indicating that the market had not fully accounted for the potential surge in demand from the mainland Chinese AI software and infrastructure sectors. GDS’s stock price skyrocketed above $40 in February, showcasing the market’s response to these developments.

Other Hedge Funds Capitalizing on the AI Boom

Triata, which manages over $1 billion in assets, has diversified its portfolio to include AI software companies engaged in cloud computing and transforming text into short videos. Meanwhile, Viridian Asset Management reported an estimated 6% return in its best month since launching in August, capitalizing on share offerings from Chinese technology companies seeking capital for expansion. According to CIO Pascal Guttieres, Viridian participated in share offerings from Hong Kong-listed RoboSense Technology Co., drug discovery firm XtalPi Holdings Ltd., vehicle chipmaker Black Sesame International Holding Ltd., and AI stock Beijing Fourth Paradigm Technology Co.

These offerings are typically priced at discounts to current market values, creating lucrative opportunities for equity capital markets funds like Viridian to profit when shares appreciate. The firm currently oversees $130 million and has secured a deal to manage up to $200 million for a US investor starting later this month, positioning it to reach $400 million around its one-year anniversary.

Aspoon Capital’s Gains in the AI Sector

Aspoon Capital Ltd., which had already invested in Chinese AI-related stocks last year, reported a 4.8% gain for the month, according to a source familiar with the matter. The firm boasted a remarkable 58% return for 2024, as highlighted in a December newsletter. Aspoon Capital has dubbed this period a “China ChatGPT moment,” drawing parallels between the rapid adoption of AI by Chinese companies and the earlier embrace of mobile internet technology.

As the landscape of Chinese equities continues to evolve, the impact of AI and robotics on market dynamics is undeniable. Investors are keenly watching these developments, as they could signal a transformative shift in the technology sector.

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