Japanese consumer finance company Orix and MVC Corporation, a wholly-owned investment company of Mitsui, have agreed to take an equity stake in Income Partners Asset Management, a Hong Kong-based fixed income asset management company that specializes in Asian debt investments.
Orix, through its subsidiary, will invest up to 20%, while MVC will invest 5% in Income Partners, which declined to disclose the value of the transactions.
Orix has also set aside $30 million for seeding new funds in Income Partners. The first one under the new shareholding structure will be a new closed-end fund that will use a variety of credit strategies and aims to generate returns in the 15-20% range for institutional investors over a three to five year period.
Emil Nguy, managing director of Income Partners says the company is targeting $50 to $100 million for the fund, with perhaps five to ten investors, depending on interest. Orix is expected to inject $10 to $15 million of this. Nguy says the fund manager is also looking at starting some more stable benchmark dollar funds.
Income Partners was established in 1993 by two Asian investment professionals, Emil Nguy and Francis Tjia, who began with the aim of building an independent indigenous Asian fund house that specialized in Asian debt investments. It currently has over $500 million of Asian (ex-Japan) debt in a variety of mutual funds.
Unlike the ill-fated Peregrine, which shared a similar focus, Income Partners made it through the Asian financial crisis. The company claims that this experience has given it unmatched expertise in managing the volatility of Asia's debt markets and identifying credit investment opportunities.
The parent company of Income Partners Asset Management -- Income Partners Group -- was the driving force behind last year's establishment of online bond trading platform, asiabondportal.com. Both Orix and MVC Corporation were also involved as angel investors in asiabondportal.com at a holding company level, before the member banks such as JP Morgan and Deutsche Bank took an equity stake.