According to sources, Hong Kong-listed asset management company Value Partners has cut about a third of its staff in China as part of cost-cutting reforms, aiming to restructure its business to boost profits amid a weak market.
Sources disclosed that the company recently laid off eight employees from its Shanghai office, with a focus on onshore private equity fund investments and maintaining client relationships with institutional investors.
Another source cited by Reuters mentioned that six out of the eight employees received notices on Monday.
The layoffs are part of a comprehensive reform initiative initiated to improve profitability, as the shrinking of managed assets led to operational losses in 2022 for the company.
All sources declined to reveal their identities as they were not authorized to speak to the media.
Value Partners is one of the largest asset management companies in Asia. A statement from a company spokesperson quoted by Reuters mentioned, “Given the rapid changes in the mainland China asset management industry, we have decided to streamline our local operations to enhance business efficiency.”
The statement also indicated, “We will seek to strengthen cooperation with our strategic shareholders and other distribution partners.” The statement did not comment on the recent layoffs.
In June last year, the Hong Kong subsidiary of GF Securities, a Chinese brokerage firm, acquired a 20.2% stake in Value Partners from the company’s founding shareholders Che Zhenghai and Ye Weiyi for HK$11.2 (US$1.41 billion), becoming the sole strategic investor in the asset management firm.
By the end of 2023, Value Partners’ managed assets had decreased to HK$5.6 billion, a 9.4% year-on-year decline, plummeting 65% from HK$15 billion at the end of 2019, mainly due to significant investments in the volatile Chinese mainland and Hong Kong markets.
On April 26, Huang Huimin stepped down as the company’s CEO and executive director.
The company stated that the CEO’s duties will be taken over by a leadership committee, currently composed of Co-Chairmen and Co-Chief Investment Officers Xie Qinghai and Su Junqi. The company is in search of a successor for the CEO position.
The latest annual report released by the company earlier this month showed a profit of HK$23 million for the full year of 2023, rebounding from a loss of HK$544 million in 2022.