UBS in Discussions with China Life for Majority Owned Asset Management Joint-venture

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Multinational investment bank UBS has entered talks with Chinese insurance giant China Life for the establishment of an asset management joint-venture in the mainland Chinese market.

Sources said to Reuters that the two parties have already executed a memorandum of understanding on the matter, with the official launch of the joint-venture contingent upon approval from the China Banking and Insurance Regulatory Commission (CBIRC).

According to the sources the proposed arrangement would see UBS hold a majority stake in the joint-venture, following the relaxation of ceilings on foreign ownership in asset management firms in 2019.

The sources said that the deal with China Life follows a failed attempt by UBS to launch an asset management joint-venture with the wealth management subsidiary of a state-owned lender.

“UBS has been keen to take an absolute-controlling status in a China unit, but its competitors are quick to snap up the best local partners,” said one of the sources.

UBS already has a presence in the Chinese asset management sector via its 49% ownership in UBS SDIC Fund Management, which had 149 billion yuan in retail fund assets as of 18 November.