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Value Partners reports a very tough first half

The China-focused asset manager revealed broad losses across AUM, revenue, net profit and EPS for the first half, while announcing new hires and a UK office.

“The first-half operating environment was tough and affected the entire asset management industry,” said Timothy Tse, chief executive officer, in a statement.

Asia fund flows dropped almost 80% in the first half compared to the same period a year prior, FSA reported earlier. Additionally, China-focused funds have had negative outflows for the trailing 12 months.

Value Partners’ 99% plunge in net profit to HK$5m ($645,000) was attributed to “a decline in gross performance fee income and mark-to-market losses of the group’s treasury operations.

“We have taken prudent measures to tighten cost control. Fixed operating expenses continued to be well covered by net management fee income, a relatively stable income source. Fixed cost coverage ratio was 2.3 times during the period,” Tse said. 

 Value Partners half year results

   H1 2016 


 AUM (US$bn)   $13.3  -15%
 Profit attributable to owners   HK$5m  -99%
 Total revenue   HK$729.6m   -21%
 Net fair value gains/losses of treasury operations   (HK$86.6m)  -169%
 Basic earnings per share (HK cents)   0.3  -99%

*compared to H1 2015. Source: Value Partners


New hires

The firm announced two senior hires who officials see as key to transforming the firm “into one of the world-class asset management firms in Asia”.

Roger Hepper was poached from JP Morgan Asia Pacific where he was chief operating officer. He will serve as Value Partners’ group COO and lead business operations and risk control.

Kenny Tjan was hired as country head of the Singapore office. He is also a senior fund manager and will help develop the firm’s Asia-Pacific and global emerging markets equity portfolios.

“Their extensive international business experience and deep understanding of Asian asset management industry will help Value Partners respond to the changing needs of investors and the fast-evolving industry landscape,” Tse said.

“As China becomes one of the world’s largest exporters of capital, Asian fund managers are entering a golden age of opportunities and Value Partners is in a sweet spot to benefit from this.”

In terms of products, fixed income funds and products covering global emerging markets may be added.

Plans are also underway to open a UK office with local investment management and business staff to serve as a western hub. No further details were provided.

China-focused Value Partners had total assets under management of $13.3bn as of 30 June.

Most Value Partners funds registered for sale in Hong Kong have outperformed their respective benchmarks over the past three years, according to FE data.

Using results rebalanced in US dollars, cumulative three-year returns of the top three are: Value Partners Classic B, with a 26% return, followed by a Taiwan fund (24.8%) and the Greater China High Yield Income fund (23.1%).

Part of the Mark Allen Group.