BlackRock, Vanguard among funds giants flocking to China

FILE PHOTO: The BlackRock logo is seen at the BlackRock Japan headquarters in Tokyo, Japan, October 20, 2016. REUTERS/Toru Hanai/File Photo

Global asset managers are embracing China’s invitation to do more business in one of the world’s fastest-growing financial markets.

At least six firms, including BlackRock Inc. and Vanguard Group Inc., have told regulators they intend to apply for fully-foreign-owned mutual fund licenses, people familiar with the matter said. In October, the China Securities Regulatory Commission said overseas institutions can apply for total control of onshore ventures starting in 2020: applications for futures firms begin Jan. 1; fund management businesses start April 1.

Fidelity International, Van Eck Associates Corp., Neuberger Berman Group LLC and Schroders Plc have also held talks with regulators, the people said, asking not to be identified because the discussions are private.

Fidelity said in a statement that the company is “actively preparing” to apply for a mutual fund license at a proper time. Neuberger Berman and Vanguard declined to comment. BlackRock, Van Eck and Schroders didn’t immediately reply to requests for comment.

The prospect of unshackled access to Chinese households’ 90 trillion yuan ($12.8 trillion) of investable assets is luring the world’s biggest money managers even as China’s economy slows and its stock market fluctuates amid a trade war with the U.S. China’s mutual fund market, or mass retail market, has ballooned more than sixfold since 2011 to almost 14 trillion yuan.

BlackRock Chief Executive Officer Larry Fink said in April he’s seeking to make the firm one of China’s leading asset managers as it expands outside the U.S., citing the potential for organic growth as the nation opens up its financial markets.

Wealthy Clients

The company, which owns a minority stake in a fund management joint venture with Bank of China Ltd., launched its first onshore private fund to qualified institutions and high-net-worth individuals last year, after winning a private funds license in 2017.

Vanguard, which doesn’t have onshore operations, sees China as the only place where it could potentially build another $5 trillion of assets under management in future, Asia CEO Charles Lin told the Chinese-language Securities Times in July.

Foreign firms have formed 44 fund management joint ventures with Chinese partners, all holding stakes smaller than 50% except JPMorgan Chase & Co., which earlier this year boosted its ownership above that level pending regulatory approval. Twenty-two global money managers, including Fidelity and Neuberger Berman, have also started private fund businesses in China over the past few years.

Bloomberg

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.