BlackRock Inc has become the first global asset manager authorized to begin a fully owned onshore mutual fund business in China, as the government opens up the country’s $3.5 trillion mutual fund industry.
BlackRock, the world’s greatest asset manager, on Friday said the China Securities Regulatory Commission (CSRC) has given its Chinese fund management unit endorsement to start activities.
China rejected foreign ownership in its mutual funds and securities sector on April 1, 2020, under a Sino-U.S. economic alliance.
“We are privileged to be in a situation where we can support more Chinese investors to access financial markets,” BlackRock CEO Larry Fink said in a statement on Friday.
Some global asset managers, including Neuberger Berman, Schroders PLC and Fidelity International, have additionally applied to set up wholly owned mutual fund businesses in China.
However, others have shied away from entering a market saturated with about 150 players.
In March, U.S. money managers Vanguard Group dropped plans to get a mutual fund permit in China, referring to a “crowded” market. All things considered, China’s mutual funds market is probably going to significantly increase to 60 trillion yuan ($8.75 trillion) in 10 years, forecast by Shanghai-based fund consultancy Z-Ben Advisors.
“It presently boils down to how these global groups really carry out their operations in the years to come,” said Z-Ben Managing Director Peter Alexander.
BlackRock’s declaration comes a month after it got a permit to operate a majority-owned wealth management venture in China. The New York-based firm likewise owned a minority stake in a mutual fund venture with Bank of China Ltd.
The firm, which managed $9 trillion worth of assets towards the end of the first quarter of 2021, on Friday said the regulatory approvals, position BlackRock to broaden the scope of its products and services to customers across China.
“Our view at BlackRock has consistently been that we should be engaged in local markets around the world, so we can react to the interesting necessities and destinations of our customers in their home business sectors,” said BlackRock Head of China Tony Tang.
