1. Is it possible to be millionaires from employment?
3. How about getting paid in millions a year before 40 years old and worth at least 100 millions in Net Worth purely from employment, and that company doesn't belong to your parents (or relatives) ?
Take a look at Value Partners Group. In the year 2007, the executive directors of the company (with their age) is as below:
- Law Ka Kin, aged 47
- Ho Man Kei, aged 41- Choi Nga Chung, aged 36
- Ngan Wai Wah, aged 34- Renee Hung Yeuk Yan, aged 33
- Louis So Chun Ki, aged 32Below is their total compensation for the year 2006 and 2007.
Compensation and Benefits of Executive Directors for the year ending 31st Dec 2006
Compensation and Benefits of Executive Directors for the year ending 31st Dec 2007
And how much are they worth in Assets?Their annual salary is slightly above HK$ 1 million (about RM 440k) , but look at their bonus (for year 2006 and year 2007)!
In 2007, 5 of the Directors were paid about HK$ 40 Million plus (about RM 18 Million), while Cheah Cheng Hye was paid HK$ 234 Million (about RM 103 Million) !
How are they paid so high? There's a quote that says, "The best way to get what you want, is to deserve it."
Do they deserve to get paid so high?
Value Partners manage Value Partners Classic Fund, which have gained 2,173.0% from 1st April 1993 up to 29th October 2010, an annualized return of 19.4% over 17+ years! They manage USD 4.5 Billion and USD 7.3 Billion for the year ending 2006 and 2007 while earning 41.8% and 41.1% for their Classic Fund investors (A Units) for the year 2006 and 2007.
Since they add value to their fund investors, i believe they deserve such high pay (they're paid 1.25% management fee + 15% performance fee).
How are they paid so high? There's a quote that says, "The best way to get what you want, is to deserve it."
Do they deserve to get paid so high?
Value Partners manage Value Partners Classic Fund, which have gained 2,173.0% from 1st April 1993 up to 29th October 2010, an annualized return of 19.4% over 17+ years! They manage USD 4.5 Billion and USD 7.3 Billion for the year ending 2006 and 2007 while earning 41.8% and 41.1% for their Classic Fund investors (A Units) for the year 2006 and 2007.
Since they add value to their fund investors, i believe they deserve such high pay (they're paid 1.25% management fee + 15% performance fee).
At the end of 2007, the each share is priced at HK$ 7.63 (about RM 3.3572), while as of this posting (12th Nov 2010), the share is priced at HK$ 7.27 (about RM 2.908). So, they're worth above RM 100 Million each (except for Mr. Law, who joins the company only in the December 2004).
Cheah Cheng Hye is a Billionaire in HK$ as well as in RM. And he's a Malaysian (Penangite, and an old frees, not to mention he's also one of the top chess player in Penang Free School back then.)
Source of the information: 2007 Annual Report of Value Partners Group
Value Partners Group's Website
Value Partners Classic Fund
Value Partners Investment Philosophies
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2 comments:
Hi Peter,
Reach your blog after reading your comment on gold. Cheah is like the most unknown fund manager in Malaysia...LOL, the Warren Buffett of China is actually a Malaysian. But, he is rather unknown here I guess. His funds focuses on deep research, which I admire.
It is normal compensation I guess for a hedge fund the size of Value Partners(I think the biggest in Asia). If they don't outperform their hurdle rate, I think their bonus would have shrunk by a lot.
Back to the company, I was actually looking at it recently, but, it has gone up too much (LOL, I am not rich enough to put money in hedge fund). If you expect money flowing into emerging markets, this is a good proxy. But, I was too late to the game, the stocks is on the high side. It is a good company, cause it is a highly scalable business. The cost you spent on researching one company , you can invest 100mil or 1bil, the cost of research is still the same. But, obviously, there is a cap due to liquidity and etc. But, value partners sometimes take some rather substantial position in a company (>5%) based on shareholding disclosure on some companies listed in HK. It is a non-capital intensive business too, so, can pay out huge part of their earnings in dividends, which they have already been doing. The key risks would be their best fund managers leaving their payroll and start up their own fund.
Again, VP is good proxy for money flowing into emerging markets. Those western pension and endowment funds with less exposure to emerging markets may now come in due to the slow growth on their part of the world.
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