Fidelity halves valuation of Ant Group after Chinese crackdown

US asset manager Fidelity Investments has halved the valuation of its shares in Ant Group, the Chinese financial technology company at the centre of a major regulatory crackdown, the Wall Street Journal reported on Monday.

The new valuation for the Jack Ma-founded company, which has been forced to restructure following scrutiny from Beijing, was $144 billion as at the end of February, based on regulatory filings cited by the WSJ. 

Ant declined to comment. Fidelity did not immediately to respond to a request for comment.

The $144 billion valuation compares with an appraised value of $295 billion as at the end of August, the WSJ report said. Fidelity was among a small group of global investors that bought into Ant three years ago.

Ant's $37 billion initial public offering (IPO) in Shanghai and Hong Kong, which would have been the largest in the world, was cancelled in November soon after Ma made a speech in Shanghai in which he called for reform of China's regulatory system.

Since then, Ant has restructured to become a financial holding company which analysts have said could dent Ant's appeal to investors because of higher capital requirements that could reduce growth prospects. 

Fidelity's reported valuation was to the end of February and would not have taken into account the impact of Ant Group's restructuring announced in April.

In May 2018, Fidelity invested about $238 million in Ant on behalf of various funds, the WSJ reported, citing Ant's IPO prospectus, in a round that valued the company at about $150 billion, higher than the US asset manager's current valuation of Ant.

Reuters reported in March that some of Ant Group's global investors valued the Chinese company at more than $200 billion based on its 2020 performance, less than the potential $315 billion valuation touted ahead of its listing.