Ties that bind

There are plenty of links between Alibaba and Yunfeng, a firm Ma and Yu founded in 2010 and which has a total of $3 billion under management.

The two entities have invested in each other, according to filings from Chinese online gaming firm Giant Interactive Group Inc with the US Securities and Exchange Commission, and sportswear maker China Dongxiang Group Co Ltd with the Hong Kong stock exchange.

Yuzhu Shi, the chairman of Giant, and Yihong Chen, the CEO of Dongxiang, are both founding partners of Yunfeng, according to Yunfeng's website.

Ma also has personal money invested in China-based Yunfeng, Alibaba's filings show.

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Giant and Dongxiang were also among around a dozen investors that poured about $500 million into Alibaba in 2011 via Yunfeng, the two firm's filings show. The investment was part of a $1.6 billion tender offer to Alibaba employees that allowed some Alibaba staff to cash out their shares in the company.

Yunfeng and Alibaba have also invested in at least three deals together, starting in 2010 when they paid $24 million for a combined 16 percent stake in a Chinese online search engine company called Sogou Inc, a subsidiary of Sohu.com Inc.

Yu said the firm told institutional players that Ma did not sit on its investment committee, which decides which companies to invest in. Yunfeng also showed investors documents to prove it sourced its deals independently, Yu added.

Among the investors that bought into the fund were Singapore sovereign wealth fund GIC, Yu said. Alibaba's arch-rival, Chinese Internet firm Tencent Holdings Ltd, was another.

Yu declined to say which entities expressed concern about Yunfeng's independence or if any of those that did chose not to invest. GIC did not respond to calls and emails seeking comment. Tencent declined to comment.

"There is a very clear separation of duties," said Yu, who sits on the four-member committee that makes investment decisions.

According to Alibaba's SEC filings, Ma donates any profits he makes from Yunfeng to charity.

Ma and Yu agreed to form the private equity firm to invest some of their personal wealth after a boat ride in June 2009 at West Lake in the eastern Chinese city of Hangzhou, Alibaba's home base.

Also on the boat was global financier George Soros, who was visiting Alibaba's headquarters, and who discussed their idea of helping a new generation of entrepreneurs in China, Yu said. Soros Fund Management declined to comment.

This year, Yunfeng has invested around $182 million alongside Alibaba in two deals totaling close to $1.4 billion. The most recent was in April, when the two agreed to pay $1.22 billion for an 18.5 percent stake in online video website Youku Tudou Inc, a business akin to Google Inc's YouTube.