HONG KONG: Value Partners Group Ltd, the largest Hong Kong partner of Ping An Insurance, said it cut management compensation by 92 percent in the first half to reduce costs.

The compensation packages, including salaries, bonuses, share-based incentives and pension contributions, dropped to HK$9.8 million ($1.3 million), from HK$124.5 million a year earlier, it said in a report released yesterday.

Fund managers like Value Partners have been cutting costs after the credit crisis wiped out 47 percent of global stock market aggregate value last year, plunging funds into losses and slashing managers' fee income.

Value Partners' share-based compensation, traditionally accounting for the bulk of its management incentives, fell nearly 99 percent to HK$1.7 million. Salaries and bonuses edged up 1 percent.

The fund house, whose assets under management rebounded 26 percent to $4 billion in the six months to June, said the US and European contributions to assets dropped in the period, as Hong Kong's share rose. The portion from pension funds and institutions gained at the expense of endowments, foundations, funds of funds, family offices and trusts, it said in the report.

It won a mandate in the first half to advise an unidentified large privately owned US manufacturing company on investments in yuan-denominated bonds and mainland-listed shares. It also added a contract to advise a US investment fund it didn't identify on stock investments.

Value Partners will offer a new share class in the third quarter for its oldest fund, Value Partners Classic Fund, that will allow daily dealing to meet investor demand for greater liquidity, it added in the report.

Last month, the fund house joined Ping An Insurance to launch exchange-traded funds in Hong Kong.

The two groups will launch the funds through Sensible Asset Management Hong Kong Ltd, which was wholly owned by Value Partners prior to its partnership with Ping An.

As part of the agreement, Ping An will invest 50 percent in Sensible Asset Management, or approximately HK$23.25 million.

China Daily - Agencies

(HK Edition 09/02/2009 page4)