Value Partners will manage a mandate of around £500m ($677m), which is a quarter of M&G’s overall £2 billion exposure to Chinese equities, according to statements released by both firms this week.
The Hong Kong headquartered firm will focus on a blend of actively managed onshore and offshore Chinese equities, using the MSCI China All Shares Index as reference, the statements noted.
The beneficiaries “are customers in the £136 billion Prudential with-profits fund, which includes PruFund, which offers investors access to a wide range of assets, across different asset types and countries, creating a diversified portfolio which spreads the risk of investment,” said an M&G spokeswoman.
Known for its value bias investment style, Value Partners was set up in 1993 and in 2007 it became the first asset management firm to be listed on the Main Board of the Hong Kong Stock Exchange. The company also has offices in Shanghai, Shenzhen, Beijing, Kuala Lumpur, Singapore and London.
“As a result of the growth of China’s equity markets, both in terms of global index weightings and overall market capitalisation, we are now seeing an increasing number of asset owners beginning to implement dedicated, standalone China allocations. We expect this to be the beginning of a major shift in strategic asset allocations toward China,” said Hendrik von Ripperda-Cosyn, country head and managing director of the European business at Value Partners.
CHINA PRESENCE
Established by Cheah Cheng Hye, Value Partners, has over 70 on-the-ground investment professionals based in Hong Kong, mainland China and Malaysia, and is one of Asia’s largest independent asset management firms, with assets under management of $12.5 billion as of 31 October 2020.
Value Partners opened an office in Shanghai and established an investment research team in 2009, and set up a wholly foreign-owned enterprise two years later. The firm gained its Qualified Domestic Limited Partner licence in 2015, which allows it to raise money in China to invest in offshore investments, and in 2017 Value Partners obtained a private fund management licence enabling it to develop its own-branded onshore investment products for eligible institutional and high net worth investors in China.
In addition, firm’s flagship Value Partners Classic Fund was approved by the China Securities Regulatory Commission as an eligible northbound fund under the Mutual Recognition of Funds scheme between mainland China and Hong Kong on 6 December 2018.
“For active managers like us, it is essential to blend our own expertise with that of a local partner to ensure our customers can benefit from their extensive experience, which should in turn result in excellent investment returns,” said Jack Daniels, CIO at M&G.
The UK-based firm, an international savings and investment business, has also selected the Asian Pacific equities investment team at M&G to manage an undisclosed amount of its Chinese equity investments, according to M&G.
The allocation of the internal mandate follows the investment by M&G in September 2019 in an Asia Pacific equity fund management and research capability, to meet increasing client demand for assets in the region.
M&G manages money for both individual savers and institutional investors in 28 markets. As at 30 June 2020, it had £339bn of assets under management and administration, around 5m retail customers and around 800 institutional clients.
