HK firm launches asset manager
The Guangdong provincial government will hold an equal stake in the venture
A Hong Kong finance house controlled by a former Goldman Sachs partner has teamed up with the Guangdong provincial government to launch the mainland's newest asset management company.
Fan Ya Tai Asset Management will focus on non-performing loans and property assets in southern China.
The joint-venture firm will be held equally by GDH, which is an investment arm of the Guangdong provincial government, and Hong Kong's AMRI Financial Group, controlled by Steven Shafran, a former Goldman partner.
Mr Shafran played a leading advisory role in the US$5.59 billion debt restructuring of Guangdong Enterprises (Holdings) (GDE), GDH's predecessor, in 2000. He will be vice-chairman of the new firm.
The venture will use GDH's connections and Mr Shafran's financial expertise team to recover non-performing loans and rehabilitate stranded property assets, according to Fan Ya Tai chairman Wu Jiesi, who also heads GDH.
Mr Wu said the firm had been approached by international investment banks with a view to taking an equity stake.
Company executives yesterday said the Fan Ya Tai team had a proven track record, recovering more than HK$3 billion in non-performing loans in three years, allowing GDE to repay $2.47 billion in debt last year - three years early.
The venture initially will manage a portfolio with an appraised value of about HK$700 million inherited from GDH, with assets in Guangdong, Hong Kong and Macau. About 61 per cent of the assets are in property. The rest is in equities, loans and accounts receivable.
Executives yesterday said it was hard to calculate an aggregate value to the non-performing loan market in southern China.
Fan Ya Tai chief executive Craig Blomquist, a former non-performing loan expert at Morgan Stanley, said: 'Our roots in southern China provide us with unparalleled knowledge and expertise in the region. We conform to the strict accounting and reporting standard demanded by Wall Street firms and are committed to creating value for our clients.'
The company is also banking on opportunities arising from China's reform of the finance sector.
The mainland transferred 1.4 trillion yuan of non-performing loans from the Big Four commercial banks to four designated asset managers.
Observers expect more transfers to help accelerate the banking clean-up process in anticipation of state banks' public listings.
