1-2-2024 (HONG KONG) Pacific Century Group (PCG), a Hong Kong investment firm founded by billionaire Richard Li, is reportedly looking to sell its majority stake in asset manager PineBridge Investments. According to three sources familiar with the matter and a deal document seen by Reuters, PCG has engaged JPMorgan to oversee the sales process and has held initial discussions with various financial institutions. The sources, who spoke on condition of anonymity due to the confidential nature of the information, revealed the potential divestment.
As of the end of 2023, PineBridge managed assets valued at approximately US$157 billion (S$210 billion), as stated on its website. PCG had acquired the New York-based asset management firm from American International Group in 2010 for US$277 million when it oversaw US$87.3 billion in assets.
While PineBridge and JPMorgan declined to comment, PCG has not yet responded to requests for comment regarding the matter.
The potential divestment comes amid challenging market conditions and fierce competition in the asset management industry, which have resulted in losses for PCG’s fund house. With nearly 60% of its portfolio exposure in the Asia-Pacific region, PineBridge has been affected by rising interest rates and geopolitical tensions that have disrupted regional asset prices.
According to the deal document shared with prospective buyers, PineBridge managed approximately 25% of Hong Kong-based insurance business FWD’s assets as of the end of September. FWD is owned by PCG.
The document also indicated that PineBridge reported a loss of US$78 million in 2022, compared to a profit of US$15 million the previous year. However, it did not provide financial results for 2023.
PineBridge operates in 25 offices globally and employs over 700 individuals, including 230 investment professionals.
Despite PCG holding a controlling stake in PineBridge and aiming to divest its entire holding, the asset manager’s management, employees, and advisors collectively hold small minority interests.
The potential sale of PineBridge could lead to PCG’s exit from its profitable China joint venture, Huatai-PineBridge Fund Management, which accounted for approximately one-third of PCG’s total assets under management, as stated in the sale document.
PCG’s other businesses include FWD, which has made unsuccessful attempts to list its shares on three occasions, as well as telecom and media group PCCW, Hong Kong’s 5G provider HKT, and property developer Pacific Century Premium Developments.
FWD’s most recent application to list on the Hong Kong stock exchange expired in September, according to filings from the bourse. FWD declined to comment on the matter.
