BlackRock, Temasek wealth management joint venture wins licence in China

BlackRock the latest foreign firm to seek to increase its presence in China
Financial services companies are are expanding their wealth management operations in China to capture rising incomes

Banking & finance

Chad Bray

Published: 11:55am, 13 May 2021

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BlackRock, the world’s biggest asset manager, said its majority-owned wealth management joint venture in China has won approval to start operating in the mainland, joining a growing band of financial service providers seeking to tap into rising incomes in the world’s second-largest economy.

The China Banking and Insurance Regulatory Commission granted an asset management licence to BlackRock CCB Wealth Management, BlackRock said Wednesday. The joint venture is 50.1 per cent owned by BlackRock, 40 per cent by a subsidiary of China Construction Bank and Singapore’s sovereign wealth fund Temasek owns 9.9 per cent.

“The Chinese market represents a significant opportunity to help meet the long-term goals of investors in China and internationally,” Laurence Fink, BlackRock’s chairman and CEO said in a statement. “We are committed to investing in China to offer domestic assets for domestic investors and look forward to creating a better financial future for more people.”

China minted more dollar-denominated billionaires last year than anywhere else in the world and became the first country globally to have more than 1,000 tycoons with fortunes worth more than US$1 billion, according to the Hurun Global Rich List 2021.

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BlackRock’s licence approval comes as a host of foreign lenders, asset managers and insurers make bigger bets this year on future economic growth – and rising affluence – in mainland China. They are gaining access to the market as Beijing further opens up its financial sector.

Citigroup, which has had a presence in the mainland since 1902, is seeking a licence later this year to open a new wholly-owned domestic securities business in the mainland after it was granted a domestic fund custody licence in September.

It also plans to hire up to 2,300 people in its wealth management business in the Asia-Pacific region as part of its push to boost assets under management in the region by US$150 billion in the run-up to 2025, including new hires in Hong Kong.

HSBC plans to invest US$3.5 billion and hire more than 5,000 people in its wealth-management business in Asia, targeting wealthy clients in mainland China, Hong Kong and Singapore.

Laurence Fink, BlackRock’s chairman and CEO Photo: Jonathan Wong

Credit Suisse said in March that it planned to triple its workforce on the mainland over the next three years.

Global banks in Hong Kong are eagerly anticipating the launch of a scheme dubbed Wealth Management Connect that will allow them to sell investment products throughout the Greater Bay Area.

The scheme could facilitate the flow of up to 300 billion yuan (US$46.5 billion) in funds through the sale of mainland investment products to Hong Kong and Macau residents and Hong Kong and Macau products to residents in nine Guangdong cities, according to Chinese regulators’ draft rules.

Four out of five mainland investors in the Greater Bay Area said they planned to buy Hong Kong investment products via the Wealth Management Connect programme, according to a survey by HSBC and the Nielsen Company (Hong Kong) conducted late last year.

This article appeared in the South China Morning Post print edition as: BlackRock venture wins nod to tap mainland’s rich

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