Caixin
Sep 24, 2020 04:45 PM
FINANCE

Executive Pick Lays Groundwork for Vanguard Getting Into China Mutual Funds

What’s new: U.S. asset management giant Vanguard Group Inc. has appointed a former financial regulator as general manager of its future fund management subsidiary in China, as it prepares to apply for a mutual fund license there, the company said in a statement on Tuesday.

The license would allow Vanguard, which has over $6 trillion in global assets under management, to sell onshore products to the Chinese public.

Before the new appointment, Luo Dengpan served as CEO of mutual fund firm Dacheng Fund Management Co. Ltd. from 2014 to 2019. He also worked for China’s securities regulator for four years, the statement said.

Vanguard’s other moves: Vanguard said last month its primary office in Asia would be located in Shanghai as it would focus more on the Chinese mainland.

Vanguard has been seeking to expand its presence in the mainland market. In 2016, it set up a wholly foreign-owned enterprise in Shanghai. Last year, Vanguard was approved to offer investment advisory services to retail clients in China through a joint venture with Chinese fintech firm Ant Group Co. Ltd., an affiliate of e-commerce giant Alibaba Group Holding Ltd.

What’s the background: Starting April 1, China allowed foreign investors to start wholly owned mutual fund management businesses, as part of efforts to further open up its financial sector.

Last month, BlackRock Financial Management Inc. became the first foreign business to receive approval to set up a wholly owned mutual fund management company in China.

Additionally, JPMorgan Chase & Co. has planned to take full ownership of its Chinese mutual fund joint venture.

Quick Takes are condensed versions of China-related stories for fast news you can use.

This story has been updated to clarify that Vanguard’s primary Asia office will be located in Shanghai. An earlier version of the story said it would move the office from Hong Kong.

Contact editor Marcus Ryder (marcusryder@caixin.com)

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