HNA in Talks to Buy Stake in Hong Kong's Value PartnersBy , , and
Deal could value independent fund manager at over $2 billion
Acquisitive Chinese firm extends spree in financial industry
Chinese conglomerate HNA Group Co. is in talks to purchase a stake in Hong Kong fund house Value Partners Group Ltd., according to people familiar with the matter, in what would be at least its fourth investment in an asset manager in half a year.
HNA is in discussions to buy at least part of Chairman Cheah Cheng Hye’s holding in Value Partners, which he helped found in 1993, the people said. It may then seek to increase its stake further, according to one of the people, who asked not to be identified because the information is private. A transaction could value the company, one of Asia’s largest independent asset managers by market capitalization, at more than $2 billion, another person said.
Value Partners said in a Hong Kong exchange filing on Monday that it’s been informed by Cheah and co-founder V-Nee Yeh that the shareholders had been approached by third parties and are in discussions with a potential bidder, which it didn’t name. The talks are ongoing and they haven’t entered into a definitive agreement. The two men own a combined 41 percent of the company’s issued shares, Value Partners said in the statement.
Value Partners rose 8.6 percent to HK$7.85 in Hong Kong afternoon trading Monday, headed for the biggest gain in more than a year before its shares were halted.
The parties aim to reach a deal within the next few weeks, according to the people. No final agreements have been signed, and there’s no certainty the talks will result in a transaction, the people said. Value Partners, which has expressed ambitions of becoming the Asian equivalent of Fidelity Investments, had about $15 billion of assets under management at the end of April, according to an exchange filing last week.
Representatives for HNA and Value Partners declined to comment. Cheah didn’t immediately reply to emailed queries, and a call to his office wasn’t answered.
HNA agreed to buy 25 percent of Old Mutual Plc’s U.S. asset management arm in March as the acquisitive aviation-to-hotels group pushes forward with a buying spree across the financial services industry. It reached a deal in January for a $200 million stake in Skybridge Capital, the U.S. fund-of-hedge funds firm founded by Anthony Scaramucci, and purchased control of Austrian asset manager C-Quadrat Investment AG this month.
“Value Partners has a strong brand presence in Hong Kong,” Linus Yip, chief strategist at First Shanghai Securities Ltd., said by phone Monday. “It would be a good fit for HNA as it seeks to build up a global network.”
Cheah started out as a journalist before working in market research in the 1980s. Shares of the company have climbed 17 percent this year through Friday, outperforming the 14 percent gain in the city’s benchmark Hang Seng Index.
HNA has been expanding its presence in Hong Kong, spending about HK$27 billion ($3.5 billion) in recent months on four government land sites in the former Kai Tak airport area. Earlier this year, the conglomerate said it set up a new unit in the city called HNA Innovation Finance Group, which will focus on bulk commodity trading, investments and consumer finance products.
The Chinese group, led by 63-year-old tycoon Chen Feng, has struck deals from Australia to Switzerland in the past two years as HNA expands its empire beyond aviation and hotels. HNA increased its stake in Deutsche Bank AG to almost 10 percent earlier this month, becoming the top shareholder in Europe’s largest investment bank. It’s also invested in Swiss duty-free operator Dufry AG and Singapore logistics provider CWT Ltd.
— With assistance by Vinicy Chan, and Joyce Koh