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November 23, 2021

Warburg Pincus in talks to buy stake in China Everbright Bank’s wealth unit

By Johney Amala

American private equity major Warburg Pincus is reportedly in talks to buy a minority hold in China Everbright Wealth Management, the wealth management unit of China Everbright Bank.

The Beijing-based bank is carrying out discussions with several potential investors for the deals worth between $300m and $400m, Bloomberg reported citing people familiar with the matter.

The people also said that a scrutiny from regulators could hinder a potential transaction, which may value China Everbright Wealth Management at around $1.5bn to $2bn.

Spokespersons for Warburg Pincus and China Everbright Bank did not comment on the news.

Established in 2019, Everbright Wealth Management has a registered capital of CNY5bn.

Everbright Bank revealed the plans to look out for strategic investors for its wealth unit in an announcement on the Shanghai exchange in May this year.

According to the filing, the bank was seeking to divest a stake of a maximum of 20% in the unit to two investors, or a maximum of 15% to a single investor.

The development comes as China continues to open up its $54 trillion financial market to foreign entities.

Earlier this year, a report by Reuters said that Warburg Pincus applied for a brokerage joint venture with the China Securities Regulatory Commission.

A number global financial giants, including Goldman Sachs, UBS and JPMorgan Chase, are also seeking to beef up their presence in the country.

Recent moves by Warburg Pincus

Last month, Warburg Pincus acquired a minority stake in the investment management firm Edelman Financial Engines.

Last year, the American private equity firm raised its holding in Singaporean real estate fund manager ARA Asset Management to 48.7%.

In 2019, Warburg agreed to acquire a majority stake in Texas-based broker-dealer Kestra Financial from Stone Point Capital.

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