BlackRock has plans to become one of China's top asset managers as the Asia region increasingly accounts for an ever-growing share of global assets.
In the annual letter published on Monday, BlackRock's chief executive Larry Fink said it aimed to be one of China's top asset managers as the Asia region contributes a larger share of global assets.
«Asia is expected to drive 50 percent of the organic AUM growth in the asset management industry over the next five years, largely driven by China, where there is increasing demand for more diversified and long-term investment solutions,» he said in his 2018 letter to shareholders.
Moving Towards Majority Stake
BlackRock has held discussions with CICC Fund Management, a unit of China International Capital Corps, about buying a majority stake in the investment unit, according to people close to the matter.
«We hope to have a majority-controlled asset management (business) in China and we are very engaged with the Chinese regulators,» said Fink, who was quoted in the «Financial Times» (behind a paywall).
So far, none of the large foreign asset managers operating in the country have applied to the China Securities Regulatory Commission for permission to move to 51 percent. Currently, BlackRock has a «private fund management» registration that lets it make and distribute investment products to qualified Chinese investors. Last year, it launched a quantitative fund investing in Chinese equities.
Faster Approvals?
BlackRock already owns 16.5 percent of Bank of China Investment Management, which is part of the Bank of China. Peter Alexander, managing director of Z-Ben, a consultancy that advises foreign asset managers in China, said the CICC unit was unusual in China as most local fund management companies had four or five shareholders.
«Global asset managers should be planning for a scenario whereby 100 percent retail mutual fund licenses in China are granted more quickly than currently expected,» Alexander said.
