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Morgan Stanley Wins Full Control Of China JV

A number of foreign firms have established JVs to tap into the world’s second-largest economy. It is one of the main ways for them to do business in mainland China.
Morgan Stanley Investment Management has won approval from
the China Securities Regulatory Commission to take a full
controlling stake in Morgan Stanley Huaxin Funds.
The move is subject to business registration and other procedures
required by Chinese regulatory entities, the US firm said in a
statement last Friday. When complete, Morgan Stanley will have
100 per cent ownership of the business, from 49 per cent.
Based in Shenzhen, Morgan Stanley Huaxin Funds became a joint
venture in June 2008.
Several other firms, such as Manulife Asset Management, the asset
management arm of Canada’s Manulife Financial, have taken full
control of Chinese JVs. In 2020 Goldman Sachs agreed to buy its
China joint venture partner. A number of foreign firms have
established JVs to tap into the world’s second-largest economy
and the structure remains one of the main ways in which Western
organizations are able to do business in China.
“Wholly-owning our China mutual funds business will allow us to
more fully serve this dynamic asset and wealth management market
and adds a significant pillar of growth to our global investment
management franchise,” Dan Simkowitz, head of investment
management at Morgan Stanley, said.
Gokul Laroia, CEO of Asia at Morgan Stanley, said: “The firm has
been active in China for almost three decades and we are
committed to our goal of building a fully-integrated financial
services firm to meet the evolving needs of domestic and global
clients. With high levels of wealth creation, growing demand for
financial advice, and with the launch of a private pension
scheme, we see long-term opportunities in China’s asset
management industry.”
Morgan Stanley’s business provides diversified investment
management services to retail and institutional clients through
mutual funds and segregated management accounts, including fixed
income, active equity, quantitative equity, and multi-asset
investment.
In November 2020 Union Bancaire Privée, the Geneva-based private
bank, announced that its wholly foreign-owned enterprise in
China, UBP Overseas Investment Management (Shanghai), had
partnered with Idinvest Partners, a European private equity firm
and a subsidiary of global investment company Eurazeo. Amundi,
the European asset management giant, and China’s BOC Wealth
Management, won a license to operate a joint venture in China in
2020. In February 2021 UK-listed Schroder Investment
Management
won regulatory clearance to set up a joint venture in
Shanghai.
A Cerulli Associates report has
pointed out the growth potential of such ventures.