Ex-Esemplia CIO wins HK licence with new firm
Emerging markets fund manager Victoire Asia Investment (VAI) has received approval in Hong Kong to undertake business in the region and brought in two more investment staff.
Aquico Wen, who moved from London to set up the firm in Hong Kong in September, has hired Young Chow as a senior analyst and Josephine Lam as operations manager. Both previously worked with Wen at US fund house Legg Mason.
Another investment specialist is due to join soon, but VAI declined to name the individual as he or she is not yet on board.
The team has substantial emerging markets expertise. Wen himself was the founder and chief investment officer of EM boutique Esemplia, which was closed last year by its parent, US asset manager Legg Mason. He has also worked at Citigroup Asset Management and JP Morgan Asset Management.
With its new type 9 licence from the Securities and Futures Commission, VAI – a 50/50 joint venture with Brazilian fund house Victoire Brasil Investimentos – can now market to professional investors out of the city. Sales will be looked after by Wen and VBI’s Sao Paulo-based CEO, Paul del Priore, and will involve marketing to a relatively small number of clients around the world.
VAI is targeting professional investors – above all institutions – globally with a strategy that invests in undervalued small to medium-sized companies (SMEs) with exposure to growth in Southeast Asia. It focuses on 10 to 20 listed and largely privately held Asian companies with market capitalisations ranging from $500,000 to $3 billion.
The focus is on higher-growth developing Asian economies – China, India, Asean and frontier markets. Today the firm’s investments are mainly in China, India, Indonesia, the Philippines and Thailand.
The SME sector offers opportunities because of the large number of companies and relatively small number of investors researching them, Wen tells AsianInvestor.
“Take the case of a company with a small subsidiary sitting on a valuable piece of land whose potential has not been fully recognised by the market,” he says. “It’s that sort of opportunity that such investors could find attractive.”
One thing that sets apart VAI apart from some firms is its ‘co-investment’ model. The Hong Kong team members have a 50% stake in the business and have also invested most of their liquid assets in the strategy.
The strategy is high-conviction, long-only, benchmark-agnostic and absolute return-orientated, says VAI, which uses Hong Kong-based Compliance Plus as its compliance services provider.
Asked if Victoire plans to sell other strategies in Asia, del Priore says it will sound out the markets locally to explore whether there is demand for Brazilian expertise. If there is, the firm will go back to the regulator for further discussions.
Victoire has a Brazil-focused strategy in a Ucits fund, notes Wen, so progress could be quicker than might otherwise be the case, should it decide to proceed.