Net profit slumped to $29.4mn in 2018, and assets under management declined to $15bn from $16.6 bn, Value Partners says in its annual report on March 12.
Performance fees, which are payments for funds that generate positive returns, plummeted to $56.17mn from $2.57bn in 2017. Management fees grew to $1.34bn from $1.19bn.
According to Chief Executive Officer Dr. Au King Lun, last year brought “the most challenging environments in recent history for the group”.
“Waves of selloffs swept across financial markets in Asia as fears about the US-China trade war, rising US interest rates and a slowdown in global growth ravaged investor sentiment,” Dr. Au stated in the report.
Nevertheless, he says Value Partners is making progress growing and transforming its business to “promising” areas such as alternative investing and the Chinese market.
The company’s financial results were in line with market expectations. A Taipei-based stock analyst notes that Value Partners had issued a profit warning in January, so the sharp decline wasn’t unexpected.
“But the company has shown some good signs recently; its net capital inflows have been gathering momentum over the past few months. Also, we’re positive on the market response to its products in the pipeline this year,” the analyst tells Asia Asset Management (AAM), speaking on condition of anonymity.
Conita Hung, investment strategy director at Hong Kong-based Gransing Securities, said that for asset management firms like Value Partners, market conditions in 2018 were the worst since the global financial crisis.
She expects this year to be better.
“The improving global economic fundamentals and the progress the US and China made over the trade negotiation are beneficial to global stock markets, which will help to boost asset managers’ overall performance incomes this year,” Ms. Hung tells AAM.