Hong Kong-based hedge fund HD Capital has outperformed the majority of its peers this year after shifting capital away from artificial intelligence-related equities and into oil tankers and shipbuilding stocks, according to a report by Bloomberg.
The $200m multi-asset fund, led by chief investment officer Michael Wang, has returned to the top tier of industry performance rankings, outperforming 97% of peers over the year and on a five-year basis, according to data from With Intelligence.
As of April, the fund’s largest positions included 11% allocated to oil transportation companies and 6.1% to shipbuilders, reflecting a strong conviction in the durability of the shipping cycle. Wang said the outlook for tanker earnings remains constructive through the end of the decade, supported by constrained fleet supply and limited shipyard capacity following years of underinvestment.
He argued that the sector benefits from structural supply constraints while remaining highly responsive to geopolitical shocks, particularly amid ongoing tensions in the Middle East that have helped push shipping rates higher.
This bullish view on shipping contrasts sharply with HD Capital’s reduced exposure to technology and AI-related equities, which Wang described as increasingly vulnerable due to aggressive capital spending by major technology firms. He warned that escalating investment in artificial intelligence infrastructure may not generate sufficient returns to justify the scale of expenditure.
Wang said that, in contrast to the uncertain payback profile of AI investment cycles, shipping offers clearer medium-term earnings visibility, supported by strong freight dynamics and limited new vessel supply entering the market before the latter part of the decade.
The shift has been reflected in performance across the sector, with shares of leading Asian shipping and shipbuilding companies, including COSCO Shipping Energy Transportation and Samsung Heavy Industries, posting significant gains over the past year.
In addition to its sector rotation strategy, HD Capital has also reduced overall equity exposure, cutting its allocation from above 90% to around 65% in March as geopolitical risks increased. The firm’s China-focused feeder strategy now holds minimal exposure to internet stocks.
Beyond public markets, the fund has also capitalised on distressed opportunities in Hong Kong’s property sector. Wang noted that HD Capital acquired debt issued by New World Development at heavily discounted levels during a period of liquidity stress, betting that systemic support from financial institutions and policymakers would stabilise the situation.
He characterised the move as a liquidity-driven dislocation rather than fundamental insolvency risk, highlighting the firm’s broader approach of targeting mis-priced assets across cyclical and stressed market environments.
