Blackrock gained approval to set up a fund management company (FMC) from the China Securities Regulatory Commission (CSRC) in August 2020, which would give the firm access to China’s $3.3trn retail mutual fund industry.
However, the FMC cannot co-exist with maintaining a PFM licence, according to Chinese regulations, and the website of the Asset Management Association of China (Amac) shows that Blackrock voluntarily withdrew the PFM registration on 23 March.
Through its PFM unit, which it established three years ago within its Shanghai-based wholly-foreign owned enterprise (WFOE), the firm launched three private funds to raise cash from eligible, wealthy investors to invest in the onshore A-share market.
“These funds have already been liquidated,” a Blackrock spokeswoman told FSA.
Blackrock was the first foreign asset manager to win approval from the CSRC to establish a wholly foreign-owned mutual fund management company.
“The new unit, called Blackrock Fund Management, is run by general manager Chi Zhang, and is still awaiting the licence to launch its mutual fund — which it must do within six months of getting the licence,” said the spokeswoman.
Six foreign firms have applied to the CSRC to set up an FMC to offer their own mutual funds to China’s retail investor market. They include Alliance Bernstein, Blackrock, Fidelity, Neuberger Berman, Schroders and Van Eck; only Blackrock has received a licence so far.
In contrast, rival US firm Vanguard, gave up its application for an FMC licence last month, to focus on its fund advisory joint venture with Ant Group.
Meanwhile, Blackrock is continuing with its plans to form a wealth management company joint venture with Singapore’s Temasek and China Construction Bank.
The firm also runs two QDLP (qualified domestic limited partnership) funds in China, through Blackrock Overseas Investment Fund Management, which allows it to raise onshore money to invest in offshore securities.
Blackrock still owns 16.5% of Bank of China Investment Management, part of Bank of China.
