Value Partners explains AUM drop, hires COO and Singapore head

Despite asset outflows and a big profit decline in the first half, the Hong Kong fund house is focused on overseas expansion, with the hire of its first group COO and a new Singapore head.
Value Partners explains AUM drop, hires COO and Singapore head

Like many of its peers, Hong Kong-based fund house Value Partners suffered amid choppy markets in the first half of 2016. It recorded a hefty 15% fall in its assets under management to $13.3 billion and an 69% decline in operating profit, to HK$110.4 million ($14.2 million).

However, the firm remains focused on plans for expansion in both its home Greater China market and overseas, having hired its first group chief operating officer this month and a new head of Singapore in June.

Brought in to help cope with the growing complexity and scale of the firm’s business, Roger Hepper will oversee operations for Hong Kong and the overseas offices. He was previously Asia-Pacific COO at JP Morgan Asset Management, where he had worked since 1987, and has been replaced by Edwin Chan. Jonathan Mo remains COO for Value Partners’ Hong Kong office.

Kenny Tjan, the new country head for Singapore, was previously Singapore-based chief investment officer at Metisq Capital. He now oversees business activities for Value Partners’ Singapore business and is also senior fund manager in charge of investment management there.

Tjan (pictured left) has substantial experience of managing Asia-Pacific and emerging-market equity portfolios, having also worked for Goldmans Sachs Asset Management, Rothschild Asset Management and Nomura Asset Management. Metisq did not respond to a request for comment on his departure.

Prior to Tjan’s arrival, group deputy chief executive Lai Voon San had been acting head of Singapore since the departure of Chuck Ng in October last year. Ng had joined Value Partners in late 2013 to set up and run the office, as first reported by AsianInvestor.

The Singapore branch now has 10 staff, including both investment and sales/marketing executives. The firm declined to comment on whether it plans to participate in the Asean collective investment scheme or on its strategy for Southeast Asian expansion.

Value Partners is also planning to set up an office in London, but declined to comment on whether the uncertainty over Britain’s vote to leave the EU has affected its plans.

Asset outflows

The firm’s first-half AUM decline was driven mainly by a net outflow of $1.3 billion. The “less robust performance of our funds” also contributed to a drop of $787 million, said a spokeswoman. She said this came against the backdrop of “a volatile market challenged by heightened uncertainty and soured investment sentiments”.

The decline in net profit was caused by a reduction in gross performance fee income – which is also dependent on market performance – as well as mark-to-market losses of the firm’s treasury operations, said the spokeswoman.

Looking to China

Asked how Value Partners expects to fare in the coming months, she noted: “Although the outlook remains challenging and volatile, we are hopeful that the second half of 2016 will bring an improvement in our operating environment.”

For instance, noted the spokeswoman, the new Shenzhen-Hong Kong Stock Connect was likely to add liquidity and a new source of support for China-related stocks.

“We will continue to work hard to prepare Value Partners for the opportunities arising from the China situation,” she added.

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