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Fidelity China Special Sits set to boost unlisted exposure

Biotech trusts top performance charts in February

Trust hopes to replicate Alibaba success

Mike Sheen, Investment Week, 08 June 2021 • 3 min read

The company, which notably benefited from being an early investor in Alibaba ahead of its record-breaking $25bn IPO in 2014, told investors this morning (8 June) that the unlisted space in China has “expanded quite markedly and offers some excellent opportunities for patient, long-term investors”.

Fidelity China Special Situations, which has been managed by Dale Nicholls since 2014, held 7.4% of its NAV plus borrowing in nine unlisted companies as of 31 March, having added Full Truck Alliance, Venturous Holdings and Chime Biologics in the previous 12 months.

This represented an increase from 6% in six unlisted companies in the previous reporting year, and has since grown to 8.1% as of the end of May, having added a new position in Beisen.

Encouraging investors to vote in favour of boosting its permitted unlisted exposure at its 20 July AGM, the company said Fidelity International “has grown its expertise in this area both in identifying and also in valuing new opportunities and then in monitoring them as they progress to their IPO”.

“At the same time the period from investment to IPO has lengthened as unlisted companies are finding it possible to fulfil their capital needs with more rounds of capital raising pre-IPO,” it added.

“Taken together this has led us to conclude that we should have the ability to hold a greater proportion of the company in unlisted investments.”

Commenting on the proposal, QuotedData analyst Jayna Rana explained that the move into unlisted companies “has been a good one for Fidelity China Special Situations over the past decade”

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