BlackRock and Neuberger Berman Seeking to Offer Mutual Funds in China -- Update
April 01 2020 - 8:05AM
Dow Jones News
By Stella Yifan Xie and Jing Yang
BlackRock Inc. and Neuberger Berman are applying to manage and
sell mutual funds in China, in what could be a watershed moment for
a global investment industry eager to access the country's huge
pool of individual investors.
BlackRock Financial Management and Neuberger Berman Investment
Adviser LLC have applied to set up new firms for their planned
mutual-fund businesses, notices on the China Securities Regulatory
Commission's website showed on Wednesday.
Chinese authorities have previously said that starting
Wednesday, foreign asset managers would be able to apply for
mutual-fund licenses, as part of broader measures to further open
its financial sector.
"We firmly believe that China is one of the biggest
opportunities for BlackRock over the long term," Geraldine
Buckingham, BlackRock's Asia Pacific head, said in a statement. The
firm expects China's onshore market to see rapid growth in
financial assets, she added.
Neuberger Berman said the application reflected its long-term
commitment to building a full-service asset-management company in
China. "We see China as a significant market opportunity," said
Nick Hoar, the group's head of Asia Pacific.
Global asset managers are already allowed to offer private funds
to rich individuals and institutions in China, managing onshore
assets, while separate programs allow them to offer international
investment products to some Chinese investors.
However foreign firms have until now been barred from China's
fast-growing mutual-fund industry. Mutual funds in China can raise
money publicly and have to follow more stringent investment and
disclosure requirements than privately raised funds.
Both firms have already set up so-called wholly foreign-owned
enterprises in China, as have more than 50 other foreign money
managers since 2017. More than two dozen have obtained private-fund
licenses to manage assets for high-net-worth individuals and
institutions.
A spokeswoman for Fidelity International said it was also
preparing a mutual-fund license application and considers China a
critical, long-term market.
Traditional asset managers in China are likely to manage about
90 trillion yuan ($12.7 trillion) in assets by 2023, according to
Oliver Wyman. As of November 2019, there were more than 120 Chinese
mutual-fund managers, overseeing about 14 trillion yuan in assets,
according to the Asset Management Association of China.
Separately, a Vanguard Group-backed venture is expected to roll
out a mutual fund investment-advisory service on Thursday to more
than 900 million users of Alipay, a popular mobile-payments
platform owned by Jack Ma's Ant Financial Services Group. Vanguard,
the world's second-largest asset manager behind BlackRock, will
offer the service through a robo adviser joint venture with
Ant.
China is gradually opening up its financial markets to
international money managers and investment banks, partly due to
yearslong prodding from the U.S. Last week, China allowed Goldman
Sachs Group and Morgan Stanley to take control of their local
securities units.
The securities regulator usually takes five working days to
decide if it will accept license applications, or ask for more
information. For other recent license approvals for similar
matters, it has subsequently approved all of the applications it
accepted, people familiar with the process said.
Write to Stella Yifan Xie at stella.xie@wsj.com and Jing Yang at
Jing.Yang@wsj.com
(END) Dow Jones Newswires
April 01, 2020 07:50 ET (11:50 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.
BlackRock (NYSE:BLK)
Historical Stock Chart
From Mar 2024 to Apr 2024
BlackRock (NYSE:BLK)
Historical Stock Chart
From Apr 2023 to Apr 2024