Value Partners wobbles as cofounder charts exit

Agencies and staff reporter

Shares of Value Partners (0806) dropped over 2 percent on the news its cofounder Cheah Cheng Hye was reportedly set to quit the Hong Kong-based asset manager in the biggest shakeup since China's GF Securities became its largest shareholder.

Cheah, a cofounder, co-chairman, and co-chief investment officer, plans to exit the firm as soon as January, the source said, adding Louis So Chun-ki, the other co-chief investment officer and a former co-chairman, will leave by the end of this year.

And So has started offloading his stake in the company, according to the source. So held at least a 2.65 percent stake of the firm's public shares by end-June, according to its interim report.

A Value Partners representative said the roles of Cheah and So remained unchanged while declining to comment further. Cheah and So didn't respond to requests seeking comment.

Chinese brokerage GF Securities acquired a 20.2 percent stake in Value Partners in June 2023 and has since been exerting its influence on the firm's operations, according to the source.

The Guangzhou-based company last month appointed its own executive directors in a board revamp, replacing So as co-chairman with Lin Xianghong. Li Qian, a senior manager at GF, was also added to the board.

Cheah co-founded the boutique fund manager in 1993 and it now has offices across China as well as in Kuala Lumpur, Singapore and London with US$5.4 billion (HK$42 billion) of assets under management as of June, down from its peak of more than US$18 billion in 2018.

Chinese brokerages, including Citic Securities (6030) and Haitong Securities (6837), have been tightening control over their Hong Kong operations as they aim to expand beyond their domestic market and mitigate risks.

The increased scrutiny has introduced hurdles to decision-making, while pay disparities between staff in Hong Kong and China have caused friction and prompted departures.

Value Partners reported an operating profit of HK$600,000 in the first six months of the year, after a loss in the year-earlier period.

Shares of Value Partners closed 2.1 percent lower to HK$1.37 yesterday.