The joint venture partner of JP Morgan Asset Management, Shanghai International Trust (Sitco), said in a recent pre-disclosure statement that it will be auctioning its remaining 49% stake, according to Shanghai United Assets and Equity Exchange website.
In the statement, the requirements for purchasing the stake were not provided.
Last month, JPMAM reached a commercial agreement with Sitco to acquire 100% ownership of their mainland venture called China International Fund Management (CIFM).
The pre-disclosure statement was the first step in the process. Next will be an official disclosure and then the purchase of the shares by JPM AM – or any other qualified fund house – can proceed.
FSA contacted the firm for more information but a spokeswoman declined to comment.
CIFM was set up in 2004 and managed assets of around RMB 150bn ($21bn) at the end of 2019, according to a previous statement.
Sitco, the venture partner, was established in 1981, with registered capital of RMB 5bn ($704m). Shanghai Pudong Development Bank is its major shareholder, according to Sitco’s website.
If JPM AM buys out its partner, it would be the first foreign fund house to own 100% of an onshore asset management firm providing mutual funds. Other firms with mainland joint ventures are likely to follow if the transaction is successful.
China has been lifting investment limitations for foreign fund management firms on several fronts. Fund houses are taking advantage of the opening up in different ways.
For example, Blackrock and Neuberger Berman applied for wholly-owned mutual fund licenses last month, which enable foreign asset managers to sell funds to retail investors in China, FSA previously reported.