JPMorgan wants full ownership of Chinese fund management JV
The bank’s asset management unit is in talks to acquire a 49% stake in China International Fund Management as China opens its financial market
Shanghai — JPMorgan Chase is seeking 100% ownership of its fund management joint venture in China, according to people familiar with the matter, a move that follows efforts to take full control of another local unit as the country opens its financial market.
The New York-based bank’s asset management division is in talks with partner Shanghai International Trust to acquire its 49% stake in China International Fund Management, which oversees 150-billion yuan ($22bn) of assets, the people said, asking not to be identified as the discussions are private. The partners haven’t yet reached an agreement on a price and the plan is subject to change, according to the people.
Last year, JPMorgan asset management division agreed to pay at least 241.3-million yuan to Shanghai Trust in boosting its stake by two percentage points to 51%. That transaction is yet to be approved by regulators.
Representatives at JPMorgan asset management, Shanghai International Trust and China International Fund declined to comment.
Global financial firms are rushing to capitalise on China’s opening of its $45-trillion financial market, with the likes of JPMorgan, Goldman Sachs and UBS adding staff and expanding their footprint in everything from futures and brokerages to asset management. Most foreign financial institutions have identified wealth management as a prime focus as Chinese households are sitting on about $13-trillion in investable assets.
Overseas investors will be able to apply for licences to start wholly owned mutual fund management firms in April, or buy out local funds. Goldman Sachs plans to apply for a licence to run a fully owned asset management operation once the rules allow, a person familiar said. Nomura Holdings’s CEO Koji Nagai said last month that its expertise catering to rich Japanese should give it an edge in managing wealth in a fast-ageing China.
Last month, regulators agreed to let Amundi become the first foreign company to control a wealth management venture. Europe’s largest fund manager will own 55% of a Shanghai-based company with Bank of China’s wealth-management arm holding the rest.
BlackRock and Temasek Holdings are in discussions to start an asset management business in China along with one of the country’s biggest banks.
China had 128 mutual fund management firms overseeing 14-trillion yuan of assets as of November, among which about a third are Chinese-foreign joint ventures, according to the Asset Management Association of China.
JPMorgan CEO Jamie Dimon has said that his firm is committed to bringing its “full force” to China. Earlier in 2019, the bank became the first US bank to receive Chinese approval to take majority ownership of a securities joint venture. It is also seeking full control of its futures unit in China, raising it from a current 49% stake, people familiar with the matter said last month.