Caixin
May 13, 2021 08:09 AM
FINANCE

BlackRock’s China Wealth Management Venture Cleared to Start Business

BlackRock and partners got the go-ahead from Chinese regulators to set up the joint venture in August
BlackRock and partners got the go-ahead from Chinese regulators to set up the joint venture in August

BlackRock Inc. won approval to start operating a wealth management business in China as the world’s largest asset manager pushes into the country’s vast financial market.

A joint venture in which BlackRock holds 50.1% received approval from the China Banking and Insurance Regulatory Commission (CBIRC) to start business, BlackRock said Wednesday. China Construction Bank owns 40% of the venture while Singapore’s state fund Holdings Pte. Ltd. has the remaining 9.9%.

Registered in Shanghai, the venture has registered capital of 1 billion yuan ($155.7 million). It was among the first foreign-controlled wealth management companies to obtain regulatory clearance to tap the country’s growing wealth as the world’s second-largest economy moves to further open its financial services sector.

As of the end of March, China had 25.03 trillion yuan ($3.87 trillion) of outstanding wealth management products, CBIRC data showed.

BlackRock and partners got the go-ahead from Chinese regulators to set up the joint venture in August, following in the footsteps of Amundi Asset Management, Europe’s largest asset manager. Paris-based Amundi won approval to set up the first foreign-controlled wealth management joint venture in China in December 2019, just five months after the government announced more market-opening measures in the financial sector, including allowing majority foreign ownership of Chinese mainland-based wealth management firms.

In February, London-based asset management group Schroders PLC also obtained approval to set up a majority-owned wealth management venture with its long-time Chinese partner, Bank of Communications Co. Ltd.

JPMorgan in March said it would take a stake in the wealth unit of China Merchants Bank.

Apart from the asset management unit, BlackRock is also awaiting final approval to start operations of its wholly owned mutual fund business. BlackRock in August got approval from China’s securities regulator to set up the country’s first wholly foreign-owned mutual fund management company.

In preparation for the new mutual fund unit, BlackRock in March closed down its private fund business in China, which it opened three years ago, to avoid conflicts of interest.

BlackRock said it accelerated hiring since last year and set up a team of more than 70 people for its China operations.

Contact reporter Han Wei (weihan@caixin.com) and editor Bob Simison (bobsimison@caixin.com)

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