Value Partners ventures into thematics

Asset Class in Focus

The Hong Kong-based firm will be launching a technology-focused multi-asset product and is preparing to develop a Greater Bay Area product, according to Eric Poon, managing director and head of sales.

Eric Poon, Value Partners

Value Partners this month received approval from the Securities and Futures Commission to launch the Asian Innovation Opportunities Fund, according to the regulator’s records.

There are already a few technology-focused products in the market. In Hong Kong, there are 23 SFC-authorised funds under the telecommunications, media and technology sector (TMT), according to FE data.

However, Poon believes that the firm’s product will be different because it will focus on Asia-Pacific markets.

Out of the 23 TMT funds, only two are targeting Asia-Pacific. Three are addressing in China and the rest are global products, FE data shows.

This is not the first time that the firm has launched a thematic product. In April 2015, it launched a healthcare-focused product, which now has $50m in assets and is only available to professional investors, according to Poon.

A multi-asset product

Unlike other technology products, the Asian Innovation Opportunities Fund is a multi-asset product, Poon added.

“When we want to be a bit defensive, we could invest into bonds and maybe cash.

“The market could be choppy and having a cushion effect could prove to be important,” he said.

The fund can allocate up to 100% of its assets to bonds, according to Vincent Ching, senior director for intermediary sales. However, although it is a multi-asset product, the fund is not a balanced fund and will focus more on equities.

Vincent Ching, Value Partners

Under “normal circumstances”, bond allocation will be below 10%, he added.

It also has the flexibility to invest up to 30% in global tech stocks if the fund manager finds good opportunities. The fund will be managed by a dedicated multi-asset team, which has been managing a global multi-asset product that was launched in 2015.

The product will look at four themes, which are e-commerce, fintech and online entertainment; artificial intelligence, big data and the internet of things; electric vehicle; and automation.

Ching added that the fund will not just look at the traditional IT sectors. For example, it can invest in banks that are utilising new technology to improve their operations and revenues.

The product is still being developed. The firm expects it to launch in the first quarter of 2019, Ching noted.

It will be distributed by six retail banks, according to Ching.

Products in the pipeline

The firm is also planning to introduce a fund focused on the Greater Bay area. The area comprises Hong Kong, Macau and nine mainland cities: Guangzhou, Shenzhen, Zhuhai, Foshan, Zhongshan, Dongguan, Zhaoqing, Huizhou and Jiangmen.

“The Greater Bay Area has become a prominent theme now,” Poon said.

So far, there is only one SFC-authorised product that focus on the Greater Bay Area, which is Manulife Asset Management’s Greater Bay Area Growth, according to FE data. That fund was launched recently in September.

Value Partners also hopes to develop alternatives offerings for professional investors and is looking at several products in the pipeline, King Au, the firm’s CEO, told FSA previously.

These include an Asian-focused private debt fund, a real estate fund and a private equity fund that will focus on private vocational schools in China.

Alternatives remain a small part of the business, accounting for 1% of the firm’s $16.6bn in AUM, according to the 2017 annual report.

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