Alibaba Group Holding Ltd Family Office Hires Citadel’s Weisberg

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Chinese e-commerce giant Alibaba’s Vice Chairman Joseph Tsai and other top executives are setting up a multi-billion dollar family office in Hong Kong. They have roped in Citadel’s Hong Kong-based managing director Oliver Weisberg to co-manage the family office with Alexander West, the founding partner of Blue Pool Capital.

Jack Ma will not be an initial participant in the family office

Sources familiar with the matter told Mia Lamar of The Wall Street Journal that the family office will start operations this summer. Citadel spokeswoman Katie Spring told Bloomberg that Weisberg will leave the firm in June. Alibaba founder Jack Ma is not an initial participant in the family office, but he may invest down the road. Jack Ma has backed private equity firm Yunfeng Capital that focuses on Chinese deals.

According to Alibaba’s IPO prospectus, Joseph Tsai held 3.2% stake in the e-commerce giant after the public offering. Given Alibaba’s $204 billion market value, Tsai’s stake is worth over $6 billion. Alibaba executives want the family office to be modeled on the investment programs of endowments like Yale University. It will focus on “generating long-term steady returns for a few select families.”

Alibaba’s Tsai has experience in family office-style investing

Mr Weisberg joined Chicago-based $26 billion hedge fund Citadel in 2006. In the past, he headed the strategic investment and distressed products group at Deutsche Bank. He has also worked at Goldman Sachs. Alibaba’s Vice Chairman Joseph Tsai himself has experience in family office-style investing. Before joining Alibaba in 1999, he worked at Investor AB.

On Wednesday, Jefferies analyst Cynthia Meng slashed her price target on Alibaba from $118 to $98, though she maintained a Buy rating on the stock. The research firm believes that Alibaba’s stricter measures to curb the sales of fake goods on its platforms are going to hurt its fiscal fourth quarter results. Jefferies expects Alibaba to report 16.1 billion yuan in Q4 revenues, which is 5.3% below the Wall Street consensus. Alibaba’s gross merchandise value is expected to come in at 576 billion yuan.

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