Investment Bank CICC Eyes Wealth of Offshore Opportunities

China International Capital Corp. (CICC), the country’s largest homegrown investment bank, said it will step up the pace of its offshore acquisitions to better serve retail clients.

“We won’t rule out increasing overseas acquisitions to expand our capabilities to serve domestic clients,” CICC CEO Bi Mingjian told Caixin at a news conference on Monday.

CICC’s goal is to acquire more foreign asset managers abroad to expand the company’s business lines overseas, and thus provide more wealth management products to clients at home, Bi said.

CICC made its first overseas acquisition in July, when it agreed to buy a majority stake in U.S.-based asset management firm Krane Funds Advisors LLC. The U.S. exchange-traded fund manager has a net asset value of $539.7 million that tracks major offshore Chinese technology companies such as Tencent Holdings Ltd., Alibaba Group Holding Ltd. and Baidu Inc. The companies didn’t disclose the size of the stake being sold or its price.

CICC was founded in 1995 as a joint venture between China Construction Bank and Morgan Stanley, which in 2010 exited the country’s first investment bank partnership with a foreign firm. In November 2015, CICC went public on the Hong Kong Stock Exchange.

Since the stock market meltdown in 2015, CICC has been expanding into retail client services while maintaining its core businesses in investment banking, equity sales and wealth management.

Chu Gang, CICC’s chief operational officer, said in 2016 that the investment bank would build its own brand of wealth management to diversify its businesses. The Krane acquisition was seen as CICC’s move in that direction.

In line with its interest in overseas acquisitions, CICC said Monday that it has set up an office in San Francisco and has applied for a financial-business license in the U.S.

Chu said on Monday that the amount of Chinese money invested overseas remains at a low level, as is the amount of overseas money invested onshore. The situation leaves CICC with room to shore up its wealth management business from both sides.

He added that the market could see a relatively big increase in cross-border capital flows, which is why CICC plans to have another business focus on cross-border wealth management.

CICC’s revenue from its overseas businesses rose 14.29% in 2017 to 2.32 billion yuan ($368.9 million), accounting for 21% of its total revenue, according to the company’s annual report. The figure was down from 23% in 2016. The investment bank’s profit surged 52% to 2.77 billion yuan, fueled primarily by the company’s investment business in private equity.

CICC’s shares dropped 3.08% to HK$15.74 ($2.01) on Tuesday in Hong Kong..

Contact reporter Leng Cheng (chengleng@caixin.com)