Amundi Asset Management gains an early mover advantage in China.

Amundi, Europe’s largest asset manager with € 1.563 trillion of assets, secured approval for the first foreigner controlled wealth management joint venture in China. On Friday, the China Banking and Insurance Regulatory Commission (CBIRC) greenlighted the Shanghai-based joint venture between Amundi and Bank of China Wealth Management (BOC).

According to the terms of the approval, Amundi will own 55% and BOC 45% of the JV.

The liberalization of Chinese financial markets

In July, China released reform policies to enhance access by foreign countries to China’s vast financial market. One of these regulations permits foreigners to majority-own wealth management companies. Moreover, the Amundi-BOC partnership is the first approval under the said rule.

Meanwhile, BlackRock and Singapore’s Temasek are also lining up to get a foothold in Chinese asset management. They are said to be in discussions with China Construction Bank to form a joint venture.

Amundi approached by Bank of China

According to a statement, the Bank of China approached Amundi (amongst other international leading asset managers) for the joint venture.

“Amundi has responded favorably to the opportunity provided by the new regulatory framework, and to the proposal by Bank of China for Amundi to become the majority shareholder of a new asset management joint venture.”

Amundi-BOC joint venture

The joint venture will be a synergy.  It will combine Amundi’s international investment management abilities and BOC’s branding, distribution channels, and management experience.

Furthermore, the joint venture “will allow Amundi to add a new pillar to its development strategy in China and to benefit from strong commercial relations with one of the leading banks in China,” said Yves Perrier, Chief Executive Officer of Amundi.

Moreover, “Amundi is proud to have been selected by Bank of China to participate in this pioneering project to build a first-class asset management company in China.”

The Bank of China established the Bank Of China Wealth Management (BOC) as a wholly-owned subsidiary on July 1, 2019. It has a registered capital of RMB 10 billion. Further, it had assets under management of RMB 1.2 trillion as of the end of September 2019.

However, the JV will only launch in the second half of 2020.

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