Amundi’s wealth management joint venture with BOC Wealth Management, Amundi BOC Wealth Management (Huihua Wealth Management in Chinese), has launched its first product in the mainland, according to a statement from the JV.
The move comes after the JV received final approval to set up its business from the China Banking and Insurance Regulatory Commission (CBIRC) in September this year. Amundi owns 55% of the wealth management JV, while the remaining stake is owned by Bank of China Wealth Management.
The JV’s first product, which is a “fixed income plus” closed-ended fund, in only for sale for eight days from 10-17 December, with a lock-up period of 725 days, according to the firm.
The product invests at least 80% of its assets in bonds and a maximum of 20% in equities, the firm said.
The fund aims to have an annualised benchmark return of 4.65%. If it exceeds that, the fund managers will charge 50% of the alpha as a performance fee.
The product charges management fees of 0.2% per annum, sale service fees of 0.3%, 0.02% trust fees and operating service fees of 0.02% annually, the statement added.
Amundi BOC Wealth Management plans to launch more products in the near future, including closed-ended fixed-income and open-ended mixed-asset funds.
Amundi BOC Wealth Management is the first joint-venture company under the CBIRC-regulated wealth management framework introduced last year that has a foreign shareholder holding a majority stake.
Amundi expects that the JV should break even financially by the end of 2021. The JV also aims its AUM to reach €60bn ($69.9bn), with at least €50m in net income by 2025, FSA previously reported.
In August, the CBIRC also gave the go-ahead for Blackrock and Temasek to form a wealth management JV with China Construction Bank. It was also reported recently that Julius Baer has plans to establish a majority-owned JV in China. If successful, it will be the first major private bank to set up a wealth management joint venture in the mainland.
As of the end of September this year, Amundi managed assets of €1.662trn globally, according to the firm’s website.