Caixin
Dec 21, 2019 04:25 AM
FINANCE

Europe’s Amundi Wins Approval for China Wealth Management Venture

Clearance of the Amundi-BOC venture followed the July release of policies to widen foreign access to China’s financial market.
Clearance of the Amundi-BOC venture followed the July release of policies to widen foreign access to China’s financial market.

Amundi Asset Management, European’s largest asset management company, won approval to set up the first foreign-controlled wealth management joint venture in China amid the country’s push to open up its massive financial industry.

The China Banking and Insurance Regulatory Commission (CBIRC) granted approval Friday for the establishment of the Shanghai-based venture, which will be 55% owned by Amundi and 45% owned by Bank of China Wealth Management, according to a statement (link in Chinese) published on the regulator’s website.

Clearance of the Amundi-BOC venture followed the July release of policies to widen foreign access to China’s financial market, including a rule allowing majority foreign ownership of mainland-based wealth management companies.

The deal marked an important step in delivering on the restructuring measures. It will help introduce advanced management and business operation mechanisms as well as international experience in asset portfolio and risk management into Chinese wealth management institutions, the CBIRC said in the statement. The joint venture will also leverage the Chinese shareholder’s expertise in domestic market management and client networking to provide more diverse products and services to the market, the commission said.

Creation of the new venture “will allow Amundi to add a new pillar to its development strategy in China and to benefit from strong commercial relations with one of the leading banks in China,” said Yves Perrier, chief executive officer of Amundi, in a press release. The parties are planning to launch the new company during the second half of 2020, the French company said.

More international asset management companies are in talks with Chinese partners in hopes of setting up majority-controlled ventures in China, the regulator said.

Caixin learned that global asset management behemoth BlackRock Inc. and Singapore’s Temasek Pte. are in discussions with China Construction Bank to set up a China-based asset management venture.

A person close to the matter told Caixin that the parties have entered a nonbinding agreement in which the foreign investors will hold a majority stake in the new unit. No timetable has been set for the partnership, and any deal will be subject to regulatory approval, the person said on condition of anonymity.

BlackRock is also seeking a license to conduct mutual fund business in China, according to the source. BlackRock obtained a private equity fund management license in China in late 2017 and has launched three onshore products targeting wealthy Chinese investors.

China raised the cap on foreign ownership in financial institutions including securities companies, fund management companies, futures companies and life insurers earlier this year, following financial market restructuring initiatives set out in late 2017. The limits are set to be fully scrapped by 2020.

Foreign financial companies have stepped up expansion of their China presence following the opening-up measures. UBS Group AG, JPMorgan Chase & Co. and Nomura Holdings Inc. all won regulatory approval for majority control of their local securities joint ventures.

Contact reporter Han Wei (weihan@caixin.com)

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