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HSBC forms fund management JV
By Xiao Min (China Daily)
Updated: 2004-09-23 10:05
HSBC Asset Management signed an agreement September 22 to form a joint
venture fund management company with Shanxi Trust and Investment Corporation Ltd
(Jintrust) in China.
According to the agreement, signed in Taiyuan, capital of North China's
Shanxi Province, HSBC Asset Management will take up 33 per cent of the equity in
the new fund venture, with an investment of 66 million yuan (US$8 million).
The trust company will take the remaining 67 per cent in the company.
But HSBC is expected to increase its stake in the joint venture to 49 per
cent when regulations allow, it said in a press release September 22.
According to China's World Trade Organization promises, foreign companies can
hold as much as a 49 per cent stake in joint venture fund management companies
starting from this December.
Blair Pickerell, Chief Executive Officer for the Asia Pacific region at HSBC
Asset Management, said that the tie-up with Jintrust is aimed to further develop
its business in China.
He said the combination of HSBC's expertise in fund management with the local
resources of its new partner is expected to offer rich investment products and
services to investors.
Wu Jin'an, chairman of Jintrust, the largest non-banking financial
institution in Shanxi Province, said the outlook for the fund management
industry in China is rosy as it has been expanding by over 50 per cent each year
for the past three years and is expected to maintain double digit growth over
the coming decade.
Jintrust hopes to work together with HSBC to build a strong fund management
company that operates to international standards, with efficient distribution
and risk control, Wu said.
China's large savings pool and market potential have attracted more than a
dozen foreign companies to form fund management joint ventures here over the
past three years.
Meanwhile, the scale of the fund market and diversification of fund products
in China have also been growing rapidly. More new fund products, such as listed
open-ended funds, monetary market funds and guarantee funds have been introduced
from overseas markets.
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