JPMorgan Set to Become First Foreign Bank to Fully Own Mutual Fund Vehicle in China
Storied American investment bank JPMorgan has entered an agreement to buy out the stake of the local joint-venture partner in its Chinese mutual fund unit.
The asset management arm of JPMorgan announced on Friday that it had entered an agreement to purchase the 49% stake in China International Fund Management (CIFM) held by Shanghai International Trust.
Shanghai International Trust is a unit of Shanghai Pudong Development Bank, a joint-stock bank listed on the Shanghai Stock Exchange.
According to JPMorgan the buy-out will make it the first foreign financial institution to acquire full ownership of a domestic Chinese fund manager should it secure approval from the China Securities Regulatory Commission (CSRC).
JPMorgan and Shanghai International Trust founded CIFM in 2004. The Shanghai-headquartered firm has 150 billion yuan in assets under management and around 300 employees.
Should the deal be approved chief executive Eddy Wong will remain at the helm of the firm.
Wong was appointed as head of CIFM in May 2019, following a stint as head of J.P. Morgan Asset Management’s Taiwan unit.
The announcement follows the cancellation of foreign ownership caps on asset management companies and securities firms in China on 1 April.
BlackRock and Neuberger Berman have also applied with Chinese authorities to establish their own wholly-owned mutual fund units within China.