Hong Kong-based asset management firm Value Partners is looking to pool money from retail investors and high net worth individuals in South Korea into its flagship high dividend fund by teaming up with Seoul-based Hanwha Asset Management.
Hanwha Asset said Oct. 18 it would join hands with Value Partners to raise funds from Korean retail investors for Value Partners High Dividend Stocks starting Oct. 28, after four years of talks.
This would mark the first attempt for Value Partners’ funds to be open to Koreans. Value Partners senior fund manager Frank Tsui told reporters in a briefing Oct. 18.
He also said that for retail investors, high-dividend equities could be an alternative destination with the looming synchronized economic slowdown heading into 2020.
Value Partners senior fund manager Frank Tsui speaks at a press briefing held Oct. 18 at the headquarters of Korea Financial Investment Association in Seoul.
“Investors should be equipped with some stable asset class in their portfolio, and high dividend equities, historically speaking, have always given investors a certain level of protection during the muted economic cycle because of the dividend payout nature,” Tsui said.
“During a crisis, equity dividends have always shown lower volatility or lower drawdown.”
Being the first asset management house to be listed on the main board of Hong Kong Stock Exchange, Value Partners has been managing Value Partners High Dividend Stocks dedicated to Asian financial markets excluding Japan, since September 2002.
The fund has seen a 743.7 percent return over the course of 17 years -- going through numerous historical troughs in financial markets.
Value Partners cited a good blend of equities generating stable and cyclical high dividend yield.
Equities with stable dividend yield will provide more protection in the investors’ portfolio, because of the companies’ defensive business nature when they generate single-digit percentage growth of sales.
In terms of cyclical sectors -- dedicated to real estate, technology and consumer discretionary goods -- Value Partners expects the downgraded cycle to bottom out in share price.
The mix “would give not only attractive dividends but also capital appreciation upside” for its high dividend fund, Tsui said.
A Hanwha Asset spokesperson said the details about the fundraising in Korea, such as the amount of money to be raised or sales channels for retail investors, has yet to be determined.
By Son Ji-hyoung (email@example.com)