Breaking News
Ad-Free Version. Upgrade your experience. Save up to 40% More details

BlackRock, Temasek to take majority stake in wealth management JV with CCB - sources

Stock MarketsDec 23, 2019 07:54
Saved. See Saved Items.
This article has already been saved in your Saved Items
© Reuters. Man passes a logo of state investor Temasek Holdings at their office in Singapore

BEIJING/SHANGHAI (Reuters) - U.S. asset manager BlackRock Inc, Singapore state investor Temasek Holdings (Pte) Ltd and China Construction Bank Corp (CCB) have agreed to set up a wealth management joint venture in China, said people with direct knowledge of the matter.

A memorandum of understanding has been announced internally within BlackRock (N:BLK) and CCB (SS:601939) (HK:0939), according to the people and an internal notice seen by Reuters.

The deal comes as China's government continues to open up its financial industry to foreign firms. On Friday, French asset manager Amundi SA (PA:AMUN) said it had won approval to establish a majority-owned wealth management venture with a unit of Bank of China Ltd (SS:601988) (HK:3988).

Chinese banks' wealth management subsidiaries have broad business capacity including launching publicly-offered products, so they are attractive to international asset managers, said Yin Ge, partner at Han Kun Law Offices in Shanghai.

Forming wealth management ventures would also allow foreign asset managers to leverage Chinese banks' distribution network, and "we have received increasing inquiries on this option," Ge said.

BlackRock, the world's largest asset manager, and Temasek will own the majority of the new venture due to ownership restrictions of wealth management units by Chinese banks, the people said.

CCB, China's second-largest bank by assets after Industrial and Commercial Bank of China Ltd (SS:601398) (HK:1398), set up a wholly owned wealth management unit this year and so cannot control another wealth management firm, the people said.

The state-backed bank has also launched a strategic partnership with BlackRock regarding investment, asset management, risk management and financial technologies, the internal notice showed.

CCB and Temasek did not respond to requests for comment. BlackRock declined to comment.


China has allowed foreign asset managers to set up private fund businesses, and next plans to scrap ownership rules on mutual fund businesses in April. Wealth management ventures offer another option for money managers to enter the country with controlling stakes.

Other "leading and capable" foreign asset management firms are also in talks with Chinese banks to set up wealth management joint ventures, said Wang Daqing, large bank department chief at the China Banking and Insurance Regulatory Commission (CBIRC).

"Foreign investors have long required greater access to China's market, so we expanded that access for them first," a CBIRC regulator overseeing the wealth management industry told Reuters.

"They now have more options when choosing to enter the market, whether it's a private fund manager or an asset management JV," the person said.

Market reaction has nevertheless been mixed. For some leading Chinese banks, setting up a wealth management firm controlled by foreign investors has limited benefits.

"The asset under management and investment power of the JV won't be reflected on the book of our bank," said the head of wealth management company of a mid-sized Chinese bank. "Plus it's capital consuming for us to set up another arm."

Under current regulation, a wealth management company must have no less than 1 billion yuan ($143 million) registered capital.

Efforts for such JVs risk descending into a simple political gesture if Chinese banks cannot leverage investment capabilities from the foreign investors, the person said.

BlackRock, Temasek to take majority stake in wealth management JV with CCB - sources

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at’s discretion.

Write your thoughts here
Are you sure you want to delete this chart?
Post also to:
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Are you sure you want to delete this chart?
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
Sign up with Email