[HONG KONG] The Hong Kong Jockey Club is divesting as much as US$1 billion in funds held with Blackstone and other buyout firms, offloading US assets amid escalating trade tensions that have intensified since Donald Trump’s presidency.
The Jockey Club, which operates the finance hub’s horse racing monopoly and is one of the city’s biggest asset allocators, is selling mostly US assets held with firms that also include TA Associates Management, Warburg Pincus, and Clayton Dubilier & Rice, according to sources familiar with the matter, who requested not to be named because the information is private.
The sales come as other Asia funds and wealthy investors dial back investments in the US, concerned that Trump’s trade wars have made the world’s largest economy much less predictable.
China Investment Corporation, the nation’s sovereign wealth fund, had looked to offload US$1 billion in positions with firms including Carlyle Group and KKR to reduce US holdings earlier this year before pulling the sale, Bloomberg News reported last month.
About 10 family offices and advisers to the ultra-rich who oversee billions of US dollars said they are reducing their exposure or freezing investments, mostly in US equities and Treasuries, Bloomberg reported in May.
The Jockey Club’s assets are being sold through different vehicles, with one containing some US$700 million of assets, according to one of the sources.
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It’s unusual for the Jockey Club to sell such a large chunk of assets in the secondary market, the sources said. Investors in private equity funds often turn to the secondary market to unload assets before the fund expires to access capital sooner. In exchange for providing this liquidity, buyers often demand discounts.
The asset owner initiated the sale process in the first quarter, and some buyers started looking at the deal in April. Jefferies Financial Group is leading the deal, the sources said. Secondaries Investor reported that the Jockey Club was seeking to sell a US$500 million portfolio.
Warburg and Blackstone declined to comment. CD&R and TA Associates did not respond to queries. The Hong Kong Jockey Club and Jefferies did not immediately respond to requests for comment.
A non-profit organisation founded in 1884, the Jockey Club operates horse racing, sports betting and a Mark Six lottery. It saw about HK$305 billion in annual customer betting, with HK$43 billion in revenue from this segment and the lottery business, according to its website. BLOOMBERG
