SHANGHAI, Feb 22 (Reuters) - Schroders said on Monday it had
received Chinese regulatory permission to form a majority-owned
wealth management venture with a unit of Bank of Communications
(BOCOM), the country's fifth biggest lender.
The announcement came days after Schroders applied
to set up a wholly-owned mutual fund business in China, where
the government fully opened up its giant financial sector to
foreign companies last year.
"Schroders has long been committed to the Chinese market,"
Peter Harrison, Schroders Group Chief Executive Officer, said in
a statement.
"The Chinese market represents a significant opportunity for
Schroders, entailing the world's second and third largest equity
and bond markets respectively."
But some fear Schroders is setting up too many platforms in
China, potentially diluting its resources to run its local
businesses. Schroeder already owns a mutual fund venture with
BOCOM and operates a private fund business in the country.
"Why would they burn themselves with an additional
platform?" said Peter Alexander, founder of fund consultancy
Z-Ben Advisors.
"They have decided to put a lot on their plate. They're
going to have to find a way to execute."
The new wealth management venture, based in Shanghai, will
be 51% controlled by Schroder Investment Management Ltd, and 49%
owned by BOCOM Wealth Management Co.
It's the third wealth management venture in China. Amundi
partnered with Bank of China, while
BlackRock and Temasek Holdings (Pte) Ltd are setting up
a similar venture with China Construction Bank.
"We look forward to being able to support savers in China
with innovative investment products ..." said Lieven Debruyne,
Schroders Global Head of Distribution.
Alexander of Z-Ben Advisors said the foreign scramble to
partner with Chinese banks did not necessarily ensure success in
China.
"There is this overwhelming desire, among foreign asset
managers to gain some access to distribution," Alexander said.
But "marketing is what really matters. And this is what's
being overlooked by a very myopic, large group of global
managers."
(Reporting by Samuel Shen and Alun John; editing by David
Evans)