BlackRock Inc (BLK.N) has become the first global asset manager authorized to start a wholly-owned onshore mutual fund business in China, as the government opens up the 3.5 trillion billion dollar mutual fund industry. dollars of the country.
BlackRock, the world’s largest asset manager, said on Friday that the China Securities Regulatory Commission (CSRC) had given its Chinese fund management unit approval to begin operations.
China lifted foreign ownership caps in its mutual fund and securities sectors on April 1, 2020, as part of a China-U.S. Trade deal.
“We are honored to be in a position where we can help more Chinese investors access financial markets,” BlackRock CEO Larry Fink said in a statement on Friday.
Several global asset managers, including Neuberger Berman, Schroders PLC (SDR.L) and Fidelity International, have also applied to establish wholly-owned mutual fund companies in China.
But others have balked at entering a crowded market of around 150 players.
In March, US fund manager Vanguard Group abandoned plans to license mutual funds in China, citing an “overcrowded” market. Read more
Still, the Chinese mutual fund market is expected to triple to 60 trillion yuan ($ 8.75 trillion) in a decade, according to forecasts from Z-Ben Advisors, a Shanghai-based fund advisory firm.
“The question now is how these global groups will actually scale their businesses over the next few years,” said Peter Alexander, CEO of Z-Ben.
BlackRock’s announcement comes a month after receiving a license to operate a majority-owned wealth management business in China. The New York-based company also owns a minority stake in a mutual fund with Bank of China Ltd (601988.SS).
The company, which managed $ 9 trillion in assets at the end of the first quarter of 2021, said on Friday that regulatory approvals position BlackRock to expand the scope of its products and services to customers across China.
“Our view at BlackRock has always been that we need to be immersed in local markets around the world, so that we can meet the unique needs and goals of our customers in their home markets,” said Tony Tang, BlackRock Director for China.
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