JPMorgan has agreed to buy out its Chinese partner’s stake to get complete control of its China mutual fund joint venture (JV).
The New York-based bank has purchased a 49% holding of Shanghai International Trust to raise its interest to 100% in the JV China International Fund Management (CIFM).
Financial terms of the transaction were not disclosed.
Last year, JPMorgan won a bid to take a controlling stake in CIFM.
CIFM oversaw assets of $21bn at the end of December 2019.
Bloomberg quoted J.P. Morgan Asset Management chairman as saying: “As we advance our onshore business in this critically important market, we look forward to continuing to meet the evolving needs of Chinese and international investors.”
JPMorgan’s move capitalises on China’s plan to eliminate foreign ownership restrictions in the fund management and securities businesses from this April.
The move is part of China’s phase-one trade deal with the US and aligns with China’s commitment to open up the financial services sector to foreign competitors.
China has pushed ahead with the liberalisation plan despite the hardships caused by the Covid-19 pandemic.
Last week, BlackRock and Neuberger Berman submitted applications to the China Securities Regulatory Commission (CSRC) to establish mutual fund businesses in China.
Meanwhile, Goldman Sachs and Morgan Stanley recently received CSRC’s nod for taking majority stake in their China securities JVs.