JPMorgan takes full control of Chinese MF JV, to buy out local partner

FILE PHOTO: A view of the exterior of the JPMorgan Chase & Co. corporate headquarters in New York City May 20, 2015. REUTERS/Mike Segar/Files/File Photo

JPMorgan Chase & Co. agreed to buy out its local partner to get full control of a Chinese mutual fund joint venture, taking advantage of the latest move by Beijing to open up the nation’s asset management and securities businesses to foreign firms.

The U.S. bank is buying a 49% stake held by Shanghai International Trust Co. to take full ownership of the venture, known as China International Fund Management Co., according to a statement Friday. The bank didn’t disclose the purchase price.

JPMorgan is the first among a raft of asset managers seeking full control of their mutual fund operations after China’s trillion dollar market opened wider this week. Starting April 1, foreign firms can set up their own money management firms and investment banks for the first time, or seek to buy out their local partners.

“As we advance our onshore business in this critically important market, we look forward to continuing to meet the evolving needs of Chinese and international investors,” Paul Bateman, chairman of J.P. Morgan Asset Management, said in a statement.

Morgan Stanley and Goldman Sachs Group Inc. were granted approvals last Friday to take control of their securities joint ventures as policy makers push ahead with the opening of the nation’s $45 trillion finance industry. Goldman has said it plans to eventually own 100% of its securities business.

Read more about China’s trillion Dollar asset management space

CIFM, a 15-year-plus partnership, has been JPMorgan’s beachhead for tapping the country’s growing affluent, with assets overseen by retail public funds alone projected to reach $3.4 trillion by 2023, according to Deloitte LLP.

The money manager offers a range of fund products from equities, bonds, retirement investment options and exchange traded and money-market funds. It also allows investors to tap oversees investments through the Qualified Domestic Institutional Investors program. CIFM managed 150 billion yuan ($21 billion) of assets and served nearly 41.6 million individuals and institutions as of the end of last year, according to its website.

JPMorgan is also pursuing other options to tap the growing wealth management market. It set up a strategic partnership with China Merchants Bank last year, making it a preferred product provider to the Chinese lender’s asset management subsidiary.

Other companies seeking to expand in the mutual fund space in China include BlackRock Inc. and Vanguard Group Inc. BlackRock, the world’s biggest money manager, is applying for a mutual fund license with China’s securities regulators, according to a filing this week.

Bloomberg

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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.