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Tencent’s “large and important gaming, social media and other content businesses are exposed to regulatory, social and political tail risks that we cannot handicap,” said Chris Wheldon, who co-manages the Magellan High Conviction Fund.
Some assets were shifted to a stake in Amazon after the Seattle-based company’s shares dropped in the wake of its second-quarter results, he said in a webinar Wednesday.
Amazon’s price fall “coincided with a change in our risk-adjusted views regarding the Tencent investment case,” he said. The U.S. e-commerce and cloud-computing firm is “right in the center of the dartboard in terms of business quality and long-term compounding potential,” Wheldon said, adding that the fund previously “had a question mark next to its valuation.”
Magellan oversees A$117 billion ($85.6 billion) in global equity and infrastructure strategies, according to its website. Its Tencent stake was in Hong-Kong listed shares of the Chinese tech giant.
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