Bank of China took the strategic Chaodi HFM 30 percent stake in hedge funds

Bank of China in the global capital market remains volatile time, a few days ago already "cover of Chencang", through its acquisition of the British subsidiary of the Swiss hedge fund HeritageFundManagementSA Company (HFM) about 30% of the shares. Yesterday, reporters from the Bank of China spokesman Wang Zhaowen, and HFM current CEO, the company confirmed the news. Wang Zhaowen said the release of the matter in a few days later, it can not disclose details. Subsequently reporter contact the British branch of the Bank of China, but as of filing time has yet to acquire specific details about the news.

HFM management of six Super 300 million fund assets

It is understood, HFM is a focus on the Asian market investment fund companies, in 2006 by BanqueHeritage and senior managers JacquesMechelany co-founder. It is Geneva, a Swiss private bank - Heritage Bank, a subsidiary. HFM Mechaleny current holders of 70 percent stake in Bank of China (Great Britain) holds 30 percent. Under the agreement, the Bank of China will share holdings to 70 percent, he will retain 30 percent shares.

On the nature of the transaction, the Swiss Federal Banking Commission spokesman TobiasLux said that the deal will be regarded as a British company, rather than by Chinese companies. He said that the Bank of China currently does not hold a Swiss asset management companies more than 10 percent of the shares.

According to the Chinese Centre for hedge funds (ChinaHedge) website reported that, HFM manages six funds, assets of more than 300 million euros (about 400 million 71 million U.S. dollars). HFM's some funds in the first half of 2008 suffered a major loss, HFM's 788 Fund is a typical Chinese. The beginning of May this year the fund lost 48.8 percent, while in 2007 the fund rate of return of 114.8 percent. Japanese business fluctuations in small companies, 788 funds in Japan fell 15.6 percent this year, the 2007 rate of return of 16.5%.

The development of the strategic nature of Chaodi

Haitong Securities financial analyst Fankun Cheung that the acquisition of Bank of China is "Chaodi" move: "Comparison of recent financial market turmoil, the company's performance decline, the Bank of China may feel that the acquisition of a good time to, but I personally think that this is not a good time , When the loan-to-bottom that do not know anyone. "

In response, Southwest University of Finance and Economics Research Center of China's financial Pan I-that the so-called "Chaodi" can contain two meanings, one is a speculative purpose Chaodi, that is, buy low sell high and another is the development of strategic significance with the Chaodi, The Bank of China as a major commercial banks, the acquisition of more inclined to this, mainly hopes to introduce market-based risk management professionals, institutions, take control of the main market risk hedging instruments and derivatives.

Fankun Cheung also said the Bank of China will be the subject of acquisition value management experience and network and client resources and further improve their own wealth management in the management level.

At present the Bank of China 70.79 percent stake in the holding, its foreign shareholders include Royal Bank of Scotland (RBS). RBS, through its subsidiaries RBSChinaInvestments a 8.25 percent stake. Singapore Temasek sovereign wealth funds held 4.13 percent of shares, holders of 1.33% UBS shares.

China's Banking new attempt

Jiedao "hedge fund" investment, China's banking sector is still a precedent.

Hedge funds originated in the 1950s the United States, in general, the private investment institutions to make use of futures, options and other financial derivative products and the associated different stocks to buy air space sales, risk hedging skills to benefit from such an operation.

"Investment Bank through the hedge fund to investment, which is very common in foreign countries, such as Credit Suisse First Boston, their hedge funds are doing well," Pan seats, said, "as domestic banks, through the acquisition of the way This expansion of business in a certain sense is progress. "

Pan-I further analyzed that ordinary commercial banks in the market risk management level, a large number of financial instruments need to hedge risk and need to draw on the experience of hedge funds, or use a similar approach to risk management, and also need to introduce talented people, methods of mechanism. Bank of China through the acquisition of the shares will be entitled to the appropriate personnel and institutions.

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Hedge funds in the end how much risk

Hedge funds in China was the view of the experts "great risk", "Shuitubufu", the development time is not right.

Speaking of hedge funds market risk, Pan-I explained that the strict sense, the hedge fund itself is set up to control the risk. It through basic tools, derivatives, futures, options, and other ways, different financial instruments structure of the interrelationship between each other hedge risk. "Hedge funds simply to hedge way to do investment, the risk will not be too great," Pan seats, said, "If the operator, and flexible management, risk hedging is basically, the net position, or risk their own little net exposure."

Pan-I pointed out that the reason why hedge funds in the West exposed high-risk, mainly in the hedge risks from its original meaning of this, a shift to speculative transactions. "Paris was done because of bank failure is a speculative transactions," said Pan Long seats.

For HFM in the Asian market this year by some of the loss, Pan I-Long pointed out that if the strict sense of hedge funds, in the face of such changes in the market, generally have corresponding basic strategy, a tool prices, must have Corresponding to the tool to allow prices to rise, in order to achieve a balance.

Source: Daily Economic News