The first Hong Kong-mainland joint-venture asset management company has been set up, with the local fund house Value Partners taking a 49 per cent stake in the Shanghai-based asset manager KBC Goldstate Fund Management.
Value Partners said yesterday it would pay 40.5 million yuan (HK$49.7 million) for the stake in KBC Goldstate, which had 970 million yuan of assets under management in seven open-ended funds at the end of last year.
The stake was previously owned by Belgian financial group KBC.
The mainland fund manager will remain under the 51 per cent control of Shenzhen-based brokerage Goldstate Securities but will be renamed Value Partners Goldstate Fund Management.
Cheah Cheng Hye, the chairman of Value Partners, said KBC Goldstate was the smallest fund manager in the industry, and he admitted there was no guarantee that it would generate any profit in the next few years.
Market regulations mean fund houses can only provide a limited variety of products, and they are faced with challenges in reaching potential customers, as they rely heavily on mainland banks to promote and sell their products.
Cheah said the industry was also faced with volatility in the market as stock markets worldwide were driven by central bank policies instead of real economic activity or company performance.
