Hong Kong asset manager Value Partners Group Ltd has announced that a unit of Guangzhou-based GF Securities will become its largest shareholder by acquiring just over 20% stake from co-founders Cheah Cheng Hye and Yeh V-Nee for HK$1.12 billion (US$141 million), a move that is expected to boost the firm’s reach in China.
The unit, GF Holdings (Hong Kong) Corp Ltd, is buying a 12.3% stake from Cheah, who is co-chairman and co-chief investment officer of Value Partners, and 7.9% from Yeh. The duo are currently the largest shareholders. Cheah’s stake will drop to 13.13% and Yeh’s to 8.45% after the sale.
Value Partners announced the deal in a filing to the Hong Kong stock exchange on June 1. At HK$3 a share, the acquisition price represents a premium of almost 28% over its closing price on that day.
The company says its board may consider a proposal to declare a special cash dividend to shareholders of up to HK$0.50 a share before the deal, which is pending regulatory approvals, is completed.
According to Cheah, Value Partners is “delighted to collaborate with GF Securities through this strategic investment”.
He predicts that it will not only boost the firm’s reach to Mainland investors, especially in the Greater Bay Area, through the Chinese brokerage’s strong distribution network, “but also strengthen our investment capabilities across different asset classes in China”.
“We are confident that our collaboration with GF Securities as a strategic shareholder can generate synergies and bring long-term and stable returns to the company’s shareholders and investors,” he says in the statement.
GF Hong Kong CEO Charles Lin says the firm “values the opportunity to collaborate with Value Partners as a strategic shareholder”.
“The synergies we create will sharpen our competitive edges in wealth and asset management. The move is also in line with GF Securities’ strategy to expand the firm’s global footprints,” he says.
Value Partners had around $6.3 billion of assets under management as of April 2023.
The company reported a HK$544.3 million net loss last year as management and performance fees plunged from a combination of inflation and interest rate hikes, China’s zero-Covid policy and geopolitical tensions. In 2021, Value Partners posted a net profit of HK$457.8 million.
