Winners rationale

A name synonymous with Greater China credit investing, Value Partners has established an enviable track record on the back of an investment process that encourages open communication and teamwork, and emphasises risk management. Value Partners holds that a portfolio built around a diversified set of actively managed positions has the potential to generate the most attractive risk-adjusted return over a full market cycle, and significant bottom-up resources that enable the manager to identify and exploit market inefficiencies in a disciplined, risk-controlled manner.

Case in point: Value Partners Greater China High Yield Bond Fund (UCITS) was incepted in December 2019 at the back of nearly-a-decade of track record in this universe. The UCITS-compliant fund is for clients who prefer a better liquidity profile, a higher average credit rating, with a focus on plain vanilla bonds.

Behind the strategy is a team that is as experienced as it is stable, with the core members having worked together since the inception of the strategy almost a decade ago. Value Partners has a long history of investing in Greater China credits. Its flagship bond fund, which is a Cayman vehicle, was successfully launched in March 2012 and has been managed by the same investment team led by Gordon Ip, chief investment officer of Fixed Income. It was actually the first China high-yield bond fund available to investors in the industry.

As an active bottom-up manager, Value Partners believes they can best add value to investors by focusing on the single B-rated and below universe, where there are less-crowded trades and issuers are arguably less followed, less researched and ultimately, less well-known.

The firm is an activist investor in Asian credit that seeks to create extra value for clients by partnering with bond issuers and actively engaging in their businesses. As such, Value Partners maintains a strong position in both the public and private markets and is deeply embedded in both onshore and offshore China, ensuring its long-term sustainability.

Within the Asian credit universe, Value Partners is positive on the outlook for the mainland Chinese property sector. Because of its domestic nature, China property is much less sensitive to the US/China trade conflict. The firm expects the physical market to remain stable in terms of national sales value but it may see divergence among cities clusters. After a strong run in 2020, the firm expects policy to turn to a more tightening bias. With the introduction of “Three Red Lines” policy to control leverage and the continuous emphasis on the theme that “House is for living, not speculating”, Value Partners expects the sector to enter into an era of controlled growth in which we see lower growth rate, lower leverage, but also lower risks.

Moreover, over half of Value Partners’ global sales and service team for intermediaries is dedicated to the private banking segment. Here in Asia, the firm’s private banking distribution efforts are led by some of the most experienced individuals in the industry and reinforced by a commitment to a best-in-class pre- and post-sales service, erudite marketing, and thought leadership initiatives that emphasise education.

In a competitive and challenging space, Value Partners distinguished itself as the provider of choice of Greater China credit opportunities, justifiably winning the Asian Private Banker award of Best Fund Provider – High Yield Bond for 2021.