Value Partners net profit jumped 66 pct in 2007

HONG KONG, March 26 (Reuters) - Value Partners Group Ltd's (0806.HK) net profit jumped nearly 66 percent in 2007, driven by a surge in assets under management and fees triggered by strong fund performance, the money manager said late on Tuesday.

The Hong Kong-based fund house said its net income rose to HK$1.42 billion ($182.6 million), or 89 Hong Kong cents per share, compared with HK$856.2 million, or 54 Hong Kong cents, in the same period a year earlier.

Revenue rose to HK$2.61 billion from HK$1.52 billion in 2006.

Turnover surged as assets under management jumped to $7.3 billion from about $4.5 billion a year earlier. The company reported its assets under management in U.S. dollars.

But the company also warned that, during the first two months of this year, assets under management fell by 11.4 percent to about $6.47 billion, hurt by declining stock markets and $81 million in outflows.

"Asset-weighted average return of funds under management was negative 10.6 percent compared to the Hang Seng Index which reported a negative return of 12.5 percent during the same period," it said in a statement.

It was the company's first set of earnings since making its debut on the market in November, when the stock launched with an IPO price of HK$7.63.

The company's shares have since been battered by a slide in the markets it invests in, falling almost 39 percent to close at HK$4.68 on Tuesday.

Value Partners, cofounded by former financial journalist Cheah Cheng Hye, began in 1993 as a boutique fund house with just $5.6 million under management.

The firm's fortunes have been closely watched, along with Asia's only other major listed asset management company, Japan's Sparx Group Co Ltd (8739.Q).

Driven by a research-intensive, bottom-up value investment philosophy, the firm's strong historic performance has allowed it to charge performance fees of 15 percent on many of its funds.

As a result, some industry watchers consider it a hedge fund manager. Institutional Investor's Alpha magazine ranked it as Asia's second-biggest hedge fund manager in 2007, after Japan's Sparx. ($1=7.778 Hong Kong Dollar) (Reporting by Jeffrey Hodgson; Editing by Edmund Klamann)