Private credit might be less attractive than it was last year as investors rush into the market, but there are sweet spots to be found.
Vision, which is based in Hong Kong and was founded in June 2000 by Jerry Wang, is one of the well-known alternative investment managers in Asia. Vision launched its flagship product, the Vision Asia Maximus Fund, in 2002 and has since then become one of the largest Asia-based and Asia-focused fund of hedge fund managers.
The investment will be financed from IfilÆs existing cash resources. Until conversion, the bond will provide Ifil with a fixed annual yield of 5%. The closing of the transaction, to take place following regulatory approval, is expected by spring 2008. The transaction marks IfilÆs first direct investment in AsiaÆs asset management industry.
The proceeds of the bond will mainly be used by VisionÆs management to buy back shares currently held by a group of VisionÆs founding financial investors that hold 32% of the companyÆs issued ordinary shares. The proceeds will also be used to provide future resources to support its expansion plans in the Asian alternative investment management field. The management and staff of Vision will remain the largest and controlling shareholders of Vision.
Ifil notes that its investment in Vision is consistent with its strategy of diversifying its investment portfolio by geography, with a focus in financial services.
Ifil is listed on the Italian Stock Exchange. It is the largest shareholder of the Fiat Group and actively manages a portfolio of assets across a range of sectors. It is one of EuropeÆs largest investment companies with a net asset value of $12.5 billion.
Vision, meanwhile, has around $1.33 billion in assets under management, 39% of which comes from clients domiciled in Asia and 73% of which comes from institutional clients, including US pension fund giant California Public Employees' Retirement System (Calpers).
Up until last year, Vision was involved in a dispute with fast-growing Penjing Asset Management, also a Hong Kong-based alternative asset manager. Vision had previously sued two former employees, who formed Penjing after leaving Vision, over loss of clients and income. Vision had sought compensation for lost fees from $122 million in assets which clients withdrew during an eight-month period following the departure of two senior employees, namely former investment department managing director Ronnie Wu and former client services unit vice-president Natalie Cruz. The dispute was resolved last year after a two year battle.
Regulators keep their eyes open on tightening insurance industry by introducing more detailed risk management requirements, which could bring pressure on smaller players.
China and India are more obvious choices for AustralianSuper to consider in Asia Pacific, but the super fund currently lacks the expertise and prefers to stick to the US and Europe.
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Investors are increasingly turning to private companies and private debt in their hunt for ESG alpha, but the age-old problem of transparency and due diligence remains