King Au, Value Partners
The firm manages three onshore equity funds in China. But each private fund in China can only have a maximum of 200 investors and the three funds have each nearly hit the limit, Au told FSA.
Therefore, the firm expects to launch another onshore equity fund by October, Au said.
“That is the reason why we need to keep launching — we hit the 200 limit and we have to do another fund,” he said.
Hong Kong funds are also planned, but he declined to elaborate other than saying they will invest in Greater China.
In the past 12 months, Value Partners has been active. It has launched two products: In April, the Total Return Bond Fund, which has assets of $51.3m, and in November 2017 the mixed-asset Asian Income Fund, which has $83.3m in assets, according to the fund factsheets.
The firm is also developing alternatives products and expects to launch two alternative funds next year, according to Au.
One is an Asia-focused private debt fund, the Asian Principal Credit, which Au believes to be unique as there are not many Asia-focused private debt funds.
“Private debt is an asset class that has been well-established in the US, and to some extent in Europe, but for Asia it is new.”
The firm aims to raise $500m for the private debt fund, Au said.
The other product is an onshore private equity fund in China, which was established in July via the Qualified Foreign Limited Partnership (QFLP) licence. With a QFLP licence, firms are able to raise money from onshore and offshore clients for private equity projects in the mainland, Au explained.
The firm partnered with Hong Kong-listed private education provider China Education to establish the private equity fund. The fund invests in companies that are related to private vocational schools in China.
A real estate private fund is also planned for next year, he added.
Alternatives remain a small part of the business, accounting for 1% of the firm’s $16.6bn in AUM, according to the annual report.
Other asset managers in the region have been ramping up alternatives, including Franklin Templeton, JP Morgan Asset Management and Kuala Lumpur-based Affin Hwang Asset Management.
Overseas, Value Partners plans offices in Malaysia and the US. Au also expects to expand its ETF business outside of Hong Kong, but he declined to give further details.