HONG KONG — Chinese investment bank GF Securities is in final talks to acquire a 20% stake in Hong Kong-listed asset manager Value Partners, sources familiar with the matter said.
GF Holdings (Hong Kong), the international arm of Hong Kong and Shenzhen-listed GF Securities, 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.
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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 authorized 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)