Tuesday, Jul 14, 2020
International Finance
Asset Management

Blackrock, Temasek to establish China asset management JV

BlackRock Temasek China
Both companies will create and distribute development products for the Chinese market

BlackRock and Temasek have entered a non-binding agreement to establish an asset management business in China, the local media reported. China Construction Bank’s asset management arm will also participate in the collaboration. 

China Construction Bank  is one of the big four banks in the People’s Republic of China. Under the terms of the agreement, BlackRock and Temasek will create and distribute development products for the Chinese market. 

The deal is subject to regulatory approval. The US firms including BlackRock are facing challenges despite China’s financial openness. Currently, there are other foreign firms seeking to establish joint ventures and explore China’s market. 

The regulatory changes in China allows foreign firms to have 51 percent of a wealth management joint venture with a bank. Companies including UBS, JPMorgan and Nomura have received regulatory approval for acquiring majority control of their local securities joint ventures, Bloomberg reported. 

BlackRock Chief Executive  Larry Fink said the company seeks to be one of China’s top asset  managers. The company perceives China to be one of its greatest platforms for growth. 

In 2018 end, nearly seven percent of BlackRock’s assets under management came from the Asia-Pacific region. Its efforts to expand into China has led to early talks with Chinese multinational Tenancent to further tap into the investment market with a diverse portfolio. 

Temasek is the world’s largest asset manager and Singapore’s state investor. Earlier this month, Temasek startup fund raised $70 million from Japan’s Marubeni and Sumitomo Mitsui Banking Corporation (SMBC) to invest in AI ventures in India and China. 

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