Value Partners Group (806:HK), one of Asia’s largest independent asset managers with approximately USD7.7billion in assets as at 31 January 2012, announced this week that Value Partners Hong Kong Limited (VPHK), a subsidiary of the Group, had agreed to acquire a 49 per cent stake in mainland mutual fund management firm KBC Goldstate Fund Management Co. The deal involves VPHK purchasing the stake from KBC Asset Management NV for a consideration of RMB40.5million with the remaining 51 per cent to be held Goldstate Securities Joint Stock Co. Ltd. This is the first time a Hong Kong-based asset manager has moved to acquire a significant stake in a mainland mutual fund manager: 49 per cent is the maximum shareholding a non-mainland shareholder can hold in a licensed mutual fund management firm.
When Vice Premier Li Keqiang visited Hong Kong last August he reiterated the government’s desire for tighter economic cooperation between Hong Kong and the mainland as set out in the national 12th Five-Year plan, and in so doing help Hong Kong become an international asset management center: some critics have complained that Hong Kong has not done enough in the past to impose itself on the global industry. Cheah Cheng Hye (pictured), chairman and co-chief investment officer of Value Partners was quoted as saying: “Upon completion of the acquisition we believe Value Partners will become the only fund management group headquartered in Hong Kong with licensed asset management firms in mainland China, Taiwan and Hong Kong managing both public and private funds.” He added: “This platform gives us great access to the Greater China markets, which will help us profit from the economic growth and wealth accumulation in the region. It will empower us to develop into an Asia-based, world-class fund management group.” The agreement has been approved by China’s financial watchdog, the Chinese Securities Regulatory Commission (CSRC).