Value Partners Launches First RQFII Fund
Value Partners announced on 15 October the offering of its first Renminbi Qualified Foreign Institutional Investor (“RQFII”) product – Value Partners China A-Share Select Fund (the “fund”). Authorized by Hong Kong’s Securities and Futures Commission for public offering, the fund, which will be launched on 16 October, offers investors a direct and broad exposure to the Mainland’s stock market.
China is the world’s third-largest stock market which has captured increasing attention from global investors, as it is more attractively valued compared to developed economies. The number of A-share companies has grown tremendously from 8 in 1990 to over 2,530 as of August 2014. With the upcoming “Shanghai-Hong Kong Stock Connect” program, the A-share market will be opened up and attract foreign inflow, acting as a positive catalyst to bolster undervalued stocks.
Value Partners China A-Share Select Fund is an actively managed A-share equity fund that has a flexible mandate to invest in Shanghai- and Shenzhen-listed companies of different sizes and industries. Managed by Value Partners’ award-winning team, the fund aims to achieve long-term capital growth and income appreciation by mainly investing in RMB-denominated stocks in China under the RQFII framework. It seeks to capture a wealth of A-share opportunities including investments in quality A-share companies with strong profitability and attractive valuation, small and medium-sized enterprises, as well as high-dividend stocks that may benefit from the narrowing of valuation gap between A and H shares.
“China’s A-share market has experienced a multi-year slump that has dragged down valuations to record low levels. Attractive valuation has offered investors good buying opportunities in quality companies,” said Mr. Alan WANG, Investment Director and Head of Research (Shanghai) of Value Partners. “We remain positive on the Chinese stock markets on the back of continuous financial and state-owned enterprise (“SOE”) reforms, stable earnings growth, and further integration with global capital markets.”
“Value Partners is among the earliest investors that have pioneered in the A-share market and we run one of the largest on-the-ground investment teams in Asia. As China opens up its capital market further, our experience and capabilities will help investors identify more value stock investment opportunities,” Mr. Timothy TSE, Chief Executive Officer of Value Partners said. “The upcoming launch of the “Shanghai-Hong Kong Stock Connect” program is set to unveil more A-share investment opportunities which we aim to capture. Leveraging our long-term track record, I believe the new A-share fund would be another outstanding product to our investors.”
Value Partners was granted its first batch of RQFII quota of RMB800 million in October 2013 and that will be applied to the fund. In April 2014, it obtained a new round of quota of RMB500 million. A series of RQFII products, including exchange-traded funds, are being developed and are expected to be launched in the near future. As of September 2014, Value Partners’ A-share assets under management (“AUM”) amounted to about USD800 million.