Shoreline to sell funds assets after founder split – exclusive

The departure of one of the Chinese distressed investor’s co-founders has caused the firm to start selling the assets held in its latest two funds.

Guangzhou-based alternative investment manager Shoreline Capital has decided to sell assets in its two existing funds due to the separation of the two founding partners.

The two existing funds are Shoreline China Value II and Shoreline China Value III with sizes of $300 million and $500 million, respectively. Fund II was fully deployed while, to date, Fund III is 95 percent deployed.

The decision to sell was triggered by the departure of Benjamin Fanger, one of the two founding partners of the firm in June. The separation was reportedly caused by a growing difference in investment direction between Fanger and the other founder, Xiaolin Zhang.

According to Shoreline, Zhang, will remain at Shoreline with a team of 46 people, to focus on exiting current investments.

Shoreline also emphasises that the majority of the investment team remains with the company. Fanger, has joined the newly set up alternative investment firm ShoreVest Partners along with former Shoreline executives.

Yet, in spite of the split, Shoreline plans to launch fund IV next year after the current investments have been sold, sources close to the firm told PDI.

Shoreline was first established in 2004 by Zhang and Fanger, who met at the University of Chicago. The company has managed more than $1.6 billion of assets in China over the past 12 years. It is one of few institutionally backed foreign managers in the Chinese NPLs space and it has raised four funds to date, three in the China Value series and one co-investment fund.