China-focused hedge funds surged in 2025. Here's who won big.

Economic Environment - At the start of 2025, concerns about investing in China were heightened due to a new protectionist US administration and instability in China's real estate market [1] - By the end of 2025, many fears were deemed overblown as the Chinese government focused on economic stimulation, leading to increased buybacks by public companies [2] Company Performance - ByteDance, after selling a majority stake in its US TikTok operations, is now valued between $350 billion and $370 billion, marking a significant increase in its worth [2] - Hedge funds that invested in China saw substantial returns, with Bridgewater's China Total Returns fund generating a 34.2% return and Tekne Capital achieving over 50% [3] Investment Strategies - Kothari's firm, which manages $1.5 billion, invested in Chinese companies like DiDi Global and GDS, capitalizing on the low valuations of strong companies amid headwinds [4] - China-focused funds performed well, with Pinpoint's strategy returning over 24% and George Jiang's Golden China fund close to 33% [5] Market Trends - The average return for China-focused funds was nearly 18%, surpassing the industry average of 10.7% [6] - Investors are closely monitoring the evolving US-China relationship, particularly regarding trade agreements related to chips and potential geopolitical tensions [6]