Posted inBusiness moves

CICC buys stake in Kraneshares

Chinese investment bank China International Capital Corp (CICC) has agreed to take a majority stake in the New York-based ETF provider Krane Funds Advisors.

CICC has bought a 50.1% stake of the China-focused ETF provider, according to the firm’s spokesperson. The details of the transaction have not been disclosed.

Prior to the acquisition, the firm was fully owned by its founder and CEO Jonathan Krane and a group of private investors. They will retain the remaining 49.9% stake. 

Kraneshares has five ETFs listed in the US. Three of them invest in China equities, one in Chinese fixed income and one in emerging market equities, according to the company’s website. They have combined assets under management of $763m.

“Our entry into the US asset management and ETF industry with Kraneshares’ platform represents a remarkable opportunity for us to provide high quality investment products and services to our clients, including individuals, advisors, and institutions, domestically and overseas,” said Bi Mingjian, CICC acting chairman and CEO in a statement.

Hong Kong-listed CICC is the investment banking joint venture between China Construction Bank and Morgan Stanley, set up in 1995. Its shareholders include the China sovereign wealth fund CIC and the Singapore sovereign wealth fund GIC.

Chinese fund houses E Fund and Bosera Asset Management partnered with Kraneshares as co-advisers, to launch Kraneshares E Fund China Commercial Paper ETF and Kraneshares Bosera MSCI China A ETF in 2014.

The acquisition is a part of an ongoing shopping spree by Chinese capital for overseas asset management businesses. The Chinese conglomerate HNA Group acquired a 25% stake in Old Mutual’s US asset management arm for about $446m in March this year. In May, HNA Group was reported to be in talks to buy a stake in Hong Kong-based Value Partners.

Part of the Mark Allen Group.