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Asia Pacific Intelligence

Two Asia Pacific joint ventures for Gottex

Thursday, November 07, 2013

Gottex has been busy in the Asia Pacific arena again this month with two lots of joint ventures. Latest news is of a jv with China based asset manager, VStone Asset Management (VStone), a private asset manager led by CEO Dr. Jiwu Chen to provide access to mainland China asset management and investors.

Max Gottschalk

Gottex will partner with Shanghaibased VStone, one of the leading private asset managers in the People's Republic of China, led by Dr. Jiwu Chen, the former CIO of Fullgoal Fund Management and China Life. VStone's total staff of 35 includes a team of mainland China equity and private equity managers and investment professionals.

The JV will provide institutional and qualified private investors access to the China onshore market (including A-Shares) and China mutual fund sector. Conversely, the partnership will operate as Gottex's distribution channel in mainland China. Gottex will acquire a minority stake in the newly formed company, while VStone will transfer its existing products and business activity to the new entity. The transaction will include a cash consideration from both parties and Gottex will issue covered warrants over 1.725 mln Gottex shares or roughly 5% of its issued share capital to the principals of VStone at an exercise price of CHF 3.50. The deal is subject to Chinese administrative approvals which are expected to be granted within the next two months.

Commenting, Max Gottschalk, CEO of Gottex Asia, said: "We are extremely pleased to have concluded our negotiations for the establishment of a joint venture asset management company with VStone and Dr. Chen, a seasoned and highly respected long-term investor in the China onshore equity and financial markets. According to research from McKinsey 75% of China's urban population will reach middle class status within less than 10 years from now which shows the enormous potential in China. The asset management industry being still in its infancy, recent government reforms and continued support for the development of a fully developed capital markets shall further boost the growth opportunity for the asset management industry in the region. Being able to offer our investors access to China's onshore equity and bond markets through a highly professional team and institutional process provides us with confidence that we believe our new venture will become a great success."

Dr. Jiwu Chen, CEO of VStone Asset Management, stated: "With China's economic development and accelerated pace of reform, along with the internationalisation of the RMB and the establishment of Shanghai free trade zone, China financial markets are constantly integrating into the global financial markets. VStone and Gottex, after a long period of mutual understanding, became partners. The partnership is not only on a capital level, but also based on a mutual recognition of ideas and goals. By leveraging the strengths and experience of both sides, the VStone Gottex partnership will have great prospects and create more value for our clients, shareholders and investors in the future."

In October, Reuters reported that Gottex had joined up with ex-Blackstone and Goldman executives to seed Asian hedge funds, via a partnership with Headland Strategic Ltd founded by Michael Garrow, an ex-Blackstone executive, and Johannes Kaps, who earlier worked at Goldman. The report said that the new initiative will offer hedge fund managers as much as $75 million each from next year. It aims to help them individually build a start-up capital of at least $100 million.

This article was published in Opalesque's Asia Pacific Intelligence our monthly research update on alternative investments in the Asia-Pacific region.
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