China’s GF in talks to buy 20% stake in asset manager Value Partners - sources (updated)

Value Partners

30/05/2023 03:37

(This May 29 story was updated on May 30 to add Value Partners'
announcement)
    By Selena  Li
       HONG KONG, May 29 (Reuters) - Chinese investment bank GF
Securities  1776.HK  is in final talks to acquire a 20% stake in
Hong Kong-listed asset manager Value Partners  0806.HK , sources
familiar with the matter said.
    GF Holdings (Hong Kong), the international arm of Hong Kong
and Shenzhen-listed GF Securities  000776.SZ , is set to pay
HK$1.1 billion ($140 million) for the stake, according to a
person familiar with the matter and a document reviewed by
Reuters.
    Media representatives for GF Securities, GF Holdings (Hong
Kong) and Value Partners did not respond to Reuters' requests
for comment on Monday.
    Following the initial publication of the story, Value
Partners disclosed in an exchange filing on Tuesday that a
co-chairman has informed the company that founding shareholders
are in ongoing discussions with a potential buyer for less than
30% of its shares. 
    The deal, which is subject to final approvals from GF
Securities' headquarters and a regulators’ review, would make GF
Holdings (Hong Kong) Value Partners' largest shareholder, the
person said.
    It will also help GF's Hong Kong unit, previously focused on
investment banking and brokerage, to enter the asset management
sector, said the source, who declined to be named as they are
not authorised to speak to media.
    Guangzhou-based GF Securities, China's seventh-largest
investment bank by market cap, already holds shares in the most
lucrative fund management businesses in China.
    It controls the country's second largest asset manager, GF
Fund Management, with a 54.5% stake, and holds a 22.6% stake in
the country’s largest fund firm E Fund Management.
    Founded by Malaysian Chinese fund manager Cheah Cheng Hye
and his partner V-Nee Yeh in 1993, Value Partners had $6.15
billion assets under management as of end 2022, and is one of
the few independent asset management boutiques in Hong Kong. 
    The Hong Kong asset manager also operates in Shanghai,
Shenzhen, Beijing, Kuala Lumpur, Singapore and London.
    With a focus on investment in China, the firm booked a net
loss of HK$544 million last year due to the "exceptionally
discouraging" performance of China assets, the company's
chairman Cheah said in its latest annual report.
    The talks were first reported by Bloomberg News on Monday. 

 (Reporting by Selena Li; Editing by Jan Harvey & Simon
Cameron-Moore)
 ((Selena.Li@thomsonreuters.com; +852 39525868;))