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Bloomberg: Joe Tsai diversifying assets, with stakes in sports, hotels, real estate

Alibaba Group Executive Vice-Chairman Joe Tsai at the SCMP Town Hall Meeting at Excelsior Hotel in Causeway Bay. 24MAR16 SCMP/Jonathan Wong Photo by Jonathan Wong/South China Morning Post via Getty Images

It’s always difficult to estimate the true net worth of billionaires, particularly those with far-flung investments headquartered overseas like Joe Tsai and before him, Mikhail Prokhorov. In Prokhorov’s case, NBA auditors reportedly found his fortune was well beyond what analysts at Forbes and Bloomberg had suggested in their estimates. The same is likely true with Tsai. There’s a 25% disparity between the two wealth trackers’ numbers in the estimates of Tsai’s wealth

And it appears that Tsai is moving into a new phase of investment, per a Bloomberg report Tuesday by Benjamin Stupples. Stupples suggests that Tsai’s “family office” — his personal investment vehicle, Blue Pool Capital — is moving out of U.S. stocks and into other assets, like five-star hotels in Spain and Portugal, New York real estate and professional sports, using his NBA and WNBA teams and their Brooklyn arena to hedge that risk with stability.

Bottom line: Tsai continues to see the Nets as a big part of his long-term portfolio.

In September, Stubbles also reported, Blue Pool, headquartered in Hong Kong, had dumped much of its U.S. stock portfolio. Bloomberg reported back then that Tsai had “ditched holdings in more than 30 US-listed companies — mostly in the tech sector — since the start of last year. Those include Alphabet Inc., Microsoft Corp. and Twitter Inc., regulatory filings show.” Indeed, it is a trend among the biggest of individual investors, Bloomberg reported.

Its sole U.S. stock holding then per Stupples was in Blue Owl Capital, a hedge fund focused on environment, social and governance investments. (One of Blue Owl’s subsidies owns small stakes in the Phoenix Suns and Sacramento Kings, which stirred some controversy last year.) The Blue Owl stake was worth a half billion dollars according to the most recent corporate filings.

In place of the U.S. stock. Tsai’s investment vehicle has committed more of its assets to real estate-based properties like the hotel chain and Manhattan real estate as well as venture capital holdings in things like sports, health care, pharmaceuticals and fitness. Bloomberg, without detailing how much Tsai had invested in the companies listed several of them...

The newest investments, Stupples writes, are in the hotel field, with Blue Pool acquiring a big stake in a portfolio of hotels in Spain and Portugal that specialize in turning historic buildings into five-star properties. Stupples suggests that Blue Pool owns a majority of the portfolio.

Bloomberg also notes Blue Pool’s well-known investment in Manhattan and a lesser known one in Lisbon, Portugal’s capital.

The firm paid $188 million in January for a penthouse previously owned by Dan Och at 220 Central Park South on New York’s Billionaires Row, just months after Tsai, 58, acquired two full-floor apartments in the same building for about $157.5 million. He also established a real estate firm based in Portugal’s capital, Lisbon, with filings listing his personal address as being in one of Hong Kong’s most exclusive residential areas.

Then, there’s sports properties, the Nets in the NBA, the Liberty in the WNBA, the Long Island Nets in the G League and Barclays Center as well as the Las Vegas Desert Dogs and San Diego Seals in the National Lacrosse League, where he’s also principal owner.

Sports, in fact, make up a big chunk of his personal wealth with the Nets and Barclays Center alone valued at $3.5 billion. As Stupples reports, the stability of the Nets investment is critical to wealth preservation which Tsai has said is a priority for Blue Pool.

“NBA teams are not going to lose asset value,” Tsai said of his basketball investment in a 2020 Bloomberg Businessweek article. “It’s like owning a penthouse apartment on Park Avenue.”

Of course, most of Tsai’s wealth is in Alibaba stock which has tumbled dramatically over the past year. According to corporate records, none of his Alibaba stock is held by Blue Pool.