With full ownership now on the table and various alternatives also open, foreign fund groups in China are weighing how to expand into a fast-changing market with lots of potential.
Foreign and domestic asset managers in China are weighing how best to respond to a recent rule change that allows offshore players to take full ownership of local fund operations.
For foreign players, the key question is whether to take full control of existing joint ventures, set up their own operation or stick with or establish new JVs. Meanwhile domestic players must decide whether to keep playing in a developing industry or team up with or sell out to wealthy foreign rivals.
On April 1 Chinese authorities removed restrictions that prevented local asset managers and securities companies from being fully foreign owned, as part of efforts to boost the financial sector following the impact of Covid-19 over the first months of the year.
JP Morgan was first to react, moving decisively on April 3 to buy the remaining 49% of its joint asset management venture with Shanghai International Trust. Other major foreign players such as BlackRock, Morgan Stanley, Goldman Sachs, Neuberger Berman, Amundi, Fidelity and Schroders are also believed to be planning local operations, dispelling any suggestions that the pandemic would halt market development.
“China’s leaders see the pandemic as a loss of face and they want to mobilise key areas of the… [read more]