The Chinese regulator has given the go-ahead for Blackrock and Temasek to form a wealth management joint venture (JV) with China Construction Bank (CCB).
The agreement will see the world’s largest asset manager and the Singapore sovereign wealth fund take a majority stake in the wealth management company (WMC) with CCB, one of China’s biggest banks.
Blackrock applied to China’s banking authority in July to form the venture.
Approval for the deal was announced on the website of the China Banking and Insurance Regulatory Commission (CBIRC).
A Blackrock spokeswoman told our sister publication Fund Selector Asia: “Blackrock and Temasek together will take a majority stake in the JV. Beyond that we don’t have more to share for now.”
However, a source said in December that the WMC will likely be based in Shanghai and intends to develop and offer onshore products to mainland China investors.
Chinese expansion
The partnership with Temasek and CCB is the latest move by Blackrock to tap into China’s growing private and public funds market.
In January 2018, Blackrock’s wholly foreign-owned enterprise (WFOE) gained a private fund manager (PFM) licence to launch onshore funds to China’s qualified investors — that is, institutions and wealthy individuals
Its WFOE in Shanghai manages three PFM products as well as two products launched under the qualified domestic limited partner scheme that allows foreign fund managers to offer products that invest in offshore investments.
In June 2019, Blackrock’s PFM WFOE next received an investment advisory licence from the Asset Management Association of China, which allows it to advise domestic fund management firms and distributors on specific investment products.
Blackrock accelerated its China expansion through applying to establish a wholly-owned retail (or public) mutual fund business in China on 1 April 2020, the first day allowed by the Chinese authorities.
The US giant still owns 16.5% of Bank of China Investment Management, part of Bank of China.
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