Gottex to establish JV with China’s VStone

07 November 2013   Category: News, Asia, China   By Asia Asset Management

Gottex Fund Management Holdings Limited (Gottex), an independent global alternative asset management group, announced on November 6 it is to establish a joint venture with VStone Asset Management (VStone), a private asset manager led by CEO Dr. Jiwu Chen, to provide access to mainland China asset management and investors.

Gottex, which has one of the largest and most experienced hedge fund teams in Asia, will partner with Shanghai-based VStone, one of the leading private asset managers in the PRC, led by Dr. Chen, the former CIO of Fullgoal Fund Management and China Life. VStone’s total staff of 35 includes a proven team of mainland China equity and private equity managers and investment professionals.

The JV will provide institutional and qualified private investors access to the China onshore market (including A-Shares) and China mutual fund sector. Conversely, the partnership will operate as Gottex’s distribution channel in mainland China. Gottex will acquire a minority stake in the newly formed company, while VStone will transfer its existing products and business activity to the new entity. The transaction will include a cash consideration from both parties and Gottex will issue covered warrants over 1.72 million Gottex shares, or roughly 5% of its issued share capital, to the principals of VStone at an exercise price of CHF 3.50. The deal is subject to Chinese administrative approvals which are expected to be granted within the next two months.

Max Gottschalk, CEO of Gottex Asia, said: “We are extremely pleased to have concluded our negotiations for the establishment of a joint venture asset management company with VStone and Dr. Chen, a seasoned and highly respected long-term investor in the China onshore equity and financial markets. According to research from McKinsey 75% of China’s urban population will reach middle class status within less than 10 years from now which shows the enormous potential in China. The creation of the Shanghai free trading zone shall further boost the growth opportunity of the asset management industry in the region. Being able to offer access to China’s onshore markets through a highly professional team and institutional process provides us with confidence that we believe our new venture will become a great success.”

Dr. Chen stated: “With China's economic development and accelerated pace of reform, along with the internationalisation of the RMB and the establishment of Shanghai free trade zone, China financial markets are constantly integrating into the global financial markets. VStone and Gottex, after a long period of mutual understanding, became partners. The partnership is not only on a capital level, but also based on a mutual recognition of ideas and goals. By leveraging the strengths and experience of both sides, the VStone Gottex partnership will have great prospects and create more value for our clients, shareholders and investors in the future.”