A rising hedge fund star has made a big bet on Chinese e-commerce site Alibaba, believing the company will be worth at least $200 billion when it goes public.
Glade Brook Capital Partners, the hedge fund firm founded in 2011 by Shumway Capital Partners veteran Paul Hudson, has amassed a roughly $250 million stake in private shares of Alibaba, according to a person familiar with the situation.
Yahoo owns about 24 percent of Alibaba, which is expected to hold an initial public offering in 2014 or 2015. Expectations are high for the IPO--which is likely to be held either in New York or Hong Kong--and could be one of the largest in recent years.
Hudson set up a private equity-style fund in August 2012, Glade Brook Private Investors, solely to invest in Alibaba. An initial round of fundraising in September 2012 took in about $30 million, which was used to purchase shares during an Alibaba financing round. That valued the company at about $35 billion.
Glade Brook finished raising a new round of capital this week, adding about $125 million by buying shares from other investors on the secondary market, according to the person. The firm now values Alibaba at approximately $140 billion, meaning its total investments are worth roughly $250 million.
But Hudson thinks Alibaba will go public this year or next and will trade at a valuation of $200 billion or higher, according to the person, who is familiar with Glade Brook's views. Hudson also believes the company is worth even more in the long term.