Commonwealth Bank announces fund management joint venture in China
21 April 2006
Colonial First State Global Asset Management, the fund management arm of the Commonwealth Bank of Australia, has become the first Australian fund management group to receive approval from the Chinese Securities Regulatory Commission (CSRC) to form a fund management joint venture in China.
The joint venture will be called First State Cinda Fund Management Company Limited* and will be based in Shenzhen, one of China’s main financial centres and adjacent to Hong Kong. The Chinese fund management industry is growing strongly with assets under management recently surpassing $80 billion.
Colonial First State Global Asset Management has a 46% shareholding and Cinda Asset Management Corporation (Cinda) has a 54% shareholding. The joint venture will have a paid in capital of approximately $17 million (RMB100 million), with the Commonwealth Bank’s investment being approximately $7.7 million.
Cinda is one of the four state-owned asset management companies that were established to manage the non-performing loans of China’s major commercial banks. It is now transitioning to a financial institution providing a broad range of services. It is one of China’s most prominent state-owned financial institutions and its funding is directly from the Ministry of Finance. Cinda is highly regarded by the local regulators including CSRC and the Chinese Banking Regulatory Commission.
The joint venture will benefit from Cinda’s relationships with large institutions and corporations and its strong connection with most major banks in China. It also complements recent Commonwealth Bank investments in Jinan City Commercial Bank and Hangzhou City Commercial Bank.
The initial focus of the joint venture will be on managing retail funds invested into domestic asset classes (Chinese equities and fixed income) and it is expected that further deregulation will allow additional offshore investment. This will enable the joint venture to leverage off the global investment expertise of Colonial First State Global Asset Management. The joint venture expects to make an application for its first fund shortly.
* The Chinese brand is Xin Da Ao Yin Fund Management Company Limited - ‘Ao Yin’ is an abbreviated form of ‘Australian Bank’ and is the Chinese brand adopted by the Commonwealth Bank for its businesses in China.
Colonial First State Global Asset Management
Colonial First State Global Asset Management is the fund management arm of the Commonwealth Bank of Australia. The group has funds under management of more than $117 billion and is the largest fund manager in Australia with offices in Sydney, London, Edinburgh, Singapore, Hong Kong and Jakarta.
First State Investments in Asia provides unit trusts, mutual funds and institutional portfolio management. The group offers a wide range of investment products, including global and Asian equity and fixed income portfolios.
Commonwealth Bank of Australia
The Commonwealth Bank of Australia, which, with total assets of $330 billion as at 31 December 2005 and operations in 13 markets worldwide, is one of the two largest Australian banks by market capitalisation. The Bank enjoys AA- and AA ratings from international ratings agencies Standard & Poor’s and Fitch, respectively.
With more than 10 million clients worldwide, the Bank provides integrated financial services, including retail, business and institutional banking, funds management, pension, general and life insurance.
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