WSJ | Fidelity Halves Its Ant Group Valuation After Beijing's

MARKETS Fidelity Halves Its Ant Group Valuation After Beijing’s Clampdown Asset manager marked Ant shares in several of its funds at prices that implied a $144 billion valuation at the end of February

By Serena Ng and Jing global investors eager to raised $14 billion and valued Yang own a piece of Ant valued the company at around $150 the company at more than billion. Fidelity invested U.S. mutual-fund giant $300 billion during its block- about $238 million on behalf Fidelity Investments has buster initial public offering, of various funds, according drastically changed its view believing the Chinese mobile to Ant’s IPO prospectus. Over of what Jack Ma’s Ant Group payments behemoth was the next two years, Ant grew Co. is worth after China’s worth more than many of the rapidly and reported profit regulatory crackdown on the world’s largest banks. of $5.8 billion on revenue of financial-technology giant That view has changed $21.5 billion in the 12 months severely dented its growth substantially after Beijing to June 2020. prospects. scuttled Ant’s listing plans in The global investors, The Boston-based asset November and Chinese regu- which also included private- manager, which was among lators cut the firm down to equity firms, sovereign- an elite group of global size by forcing it to comply wealth funds and pension investors that bought into with a bevy of financial regu- plans, were on the cusp of Ant three years ago, marked lations. reaping a massive windfall Ant shares in several of its Global investors have last fall. Now, it is far from funds at prices that implied lowered their expectations certain that those investors a $144 billion valuation for of Ant’s future revenue will end up making a profit the company at the end of and profit. Their marks on and they can’t easily sell February, according to regu- unlisted shares can vary Ant owns Alipay, a popular their investments until the latory filings. widely. Fidelity’s recent company revives its plans to mobile payments and life- The prices were below disclosures reveal the go public again, which could style app that has more than what Fidelity originally paid conclusions reached by one be years away. The Wall a billion users in China. It for Ant’s shares, suggesting sophisticated investor. A Street Journal has reported the firm believes it could Fidelity spokesperson said handled the equivalent of that global investors previ- incur a loss on the invest- the firm doesn’t comment on more than $17 trillion worth ously agreed to terms that ment. They also reflect a individual companies. Ant of payment transactions in were unusually favorable to big comedown from last declined to comment. the year to June 2020. In Ant, which limited their own August, when Fidelity’s Mutual funds regularly addition, Ant has leveraged exit options. marks pinned the company’s update the market values its giant customer base to After Ant’s IPO was called valuation at $295 billion, the of assets in their portfo- cross-sell many other finan- off, the company was chided filings showed. At the time, lios, so it is possible that the cial products—from mutual by Chinese regulators for the Hangzhou-based startup firm’s marks on Ant shares funds to insurance policies— straying too far from its was preparing to go public could be raised or lowered and has originated large roots as a payment provider and had just released listing in the future. Investments volumes of short-term loans and was ordered to rectify documents that detailed in pre-IPO companies make to Alipay users. problems in its other busi- how profitable it was and up only a small part of Fidel- In May 2018, a small group nesses. The company, how quickly it had grown in ity’s stock funds, which are of global investors were controlled by billionaire Mr. recent years. mostly invested in publicly given a rare opportunity to Ma, said last month that it In the ensuing months, traded equities. buy Ant shares in a deal that would apply to become a

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