To say that Value Partners had a good year would be an understatement. Since April 2009 the Hong Kong–based hedge fund firm’s assets under management have almost doubled, to $5.7 billion. And to make up for a disastrous 2008, when many of its funds plunged more than 40 percent, Value Partners posted returns as high as 117 percent last year.
After three years at No. 2, Value Partners takes over the No. 1 spot in the Asia Hedge Fund 25, Institutional Investor’s ranking of the largest Asia-based single-manager hedge fund firms. But its dramatic growth in 2009 had little to do with investor inflows.
“We had minimal net subscription last year, but fund performance contributed a lot to the increasing assets under management,” says deputy CIO Louis So.
For that performance, publicly traded Value Partners owes only so much to China’s recent bull market. In 2009 the firm’s funds far outstripped the Hang Seng index, whose 52 percent rise doubled that of the Standard & Poor’s 500 index. Value Partners’ flagship, the $812 million Classic Fund, gained 82.9 percent, while its $127 million Chinese Mainland Focus Fund gained 86 percent.
Like roughly half of the firms in the Asia Hedge Fund 25, Value Partners relies on a long-short equity strategy. It takes what So calls a contrarian, bottom-up approach to picking Asian stocks, with a focus on Greater China. Last year alone ....