by Zhang Shidong at scmp.com
Shanxi Trust is selling a 31 per cent stake in HSBC Jintrust Fund Management, its joint venture with HSBC Holdings, leaving the door open for the UK-based bank to take control of the fund manager and increase its footprint in China’s 28 trillion yuan (US$3.9 trillion) mutual fund industry.
The stake in Shanghai-based HSBC Jintrust, in which HSBC already has a 49 per cent interest through an investment unit, has been up for sale for 1 billion yuan since June 29, according to a statement on the website of the National Public Resource Trading Platform. Any HSBC bid to buy the stake will be given priority, the statement said.
Should the bank exercise its priority right, it will become the controlling shareholder of the fund management firm with an 80 per cent stake. Shanxi Trust, a trust and investment firm backed by the government of China’s Shanxi province, currently controls 51 per cent of HSBC Jintrust.
“HSBC is one of the largest foreign investors operating in China,” the bank said in an email response to the Post. “The group is open to opportunities to expand its businesses at the right moment and that are aligned to its strategic growth plans.”
Wall Street firms and other global financial giants have been strengthening their footing in China after regulators scrapped an ownership limit in the asset-management industry in 2020. JPMorgan Asset Management bought out its local venture with Shanghai Trust this year, and Morgan Stanley took full control of a fund unit that was jointly owned by Huaxin Securities.
Bidding for the stake in HSBC Jintrust will be open for 40 working days, and a winning outside bidder will need to contend with HSBC, the statement said. Only when the bank relinquishes its priority right can the winning bidder become a new shareholder, it said.
HSBC Jintrust was founded in 2005 and currently manages 35 funds with a combined 53.1 billion yuan in assets with a staff of 180, according to its website. It is ranked 77th among China’s mutual fund firms in terms of assets under management, according to fund tracker Howbuy.
Four funds steered by Lu Bin, HSBC Jintrust’s chief investment officer, have all trailed the broader market this year, according to Bloomberg data. HSBC Jintrust Era Pioneer Mixed Fund, the best-performing fund, has gained 0.1 per cent this year, while HSBC Jin Xia Long Teng Fund, the worst-performing fund, has lost 24 per cent of its value.read more