UK Asset Manager Schroders Gets China Fund Unit Green Light

Schroders says the move will help them expand their business and investment in China. Photo: Reuters

British asset manager Schroders has won Chinese regulatory approval to set up a wholly-owned mutual fund unit in China.

The go-ahead comes as Beijing accelerates the opening up of its giant financial sector to foreigners, as it bids to boost its economic recovery after three years of painful Covid curbs and shutdowns.

Last month, US asset manager Neuberger Berman celebrated the opening of its China retail fund business, while Fidelity International was granted a mutual fund licence in the country.

Authorities have also recently allowed Canada’s Manulife Financial Corp to take full control of its Chinese mutual fund venture.

Also on AF: China Reveals 60,000 Covid Deaths After WHO Data Doubts

The China Securities Regulatory Commission (CSRC) gave the green light to Schroders late on Friday, allowing the British asset manager to expand its footprint in China, where Schroders already owns a mutual fund venture, as well as a wealth management venture.

Setting up a wholly-owned retail fund business in China is testament to Schroder’s long-term commitment to the country – a key component of the group’s global strategy, the company said in a statement.

Obtaining the go-ahead from the CSRC is a crucial step that strengthens Schroder’s confidence to expand business and investment in China, Global Head of Distribution Lieven Debruyne said in the statement.

China scrapped foreign ownership caps in its $3.7 trillion mutual fund industry in 2019, and BlackRock become the first foreign asset manager to open a fully-owned retail fund business in the country.

Other players seeking such a licence include VanEck and AllianceBernstein.

Reuters with additional editing by Sean O’Meara

Sovereign Wealth Funds’ Historic Drop Despite Asia Mega-Deals

Blackrock Shelves China Bond ETF – FT

Sean O'Meara

Sean O'Meara is an Editor at Asia Financial. He has been a newspaper man for more than 30 years, working at local, regional and national titles in the UK as a writer, sub-editor, page designer and print editor. A football, cricket and rugby fan, he has a particular interest in sports finance.