J.P. Morgan Asset Management Receives Regulatory Approval for 100% Ownership of China Joint Venture

Rhea-AI Summary

On January 20, 2023, J.P. Morgan Asset Management (JPMAM) announced regulatory approval from the China Securities Regulatory Commission (CSRC) for its acquisition of China International Fund Management Co., Ltd. (CIFM). This acquisition allows CIFM to operate under the JPMAM brand in China, enhancing its integration into the global operating model. With assets of approximately 170 billion RMB (USD $23.9 billion), CIFM's expertise will be combined with JPMAM's international capabilities. The goal is to make JPMAM China the leading foreign asset manager in China while contributing to capital growth and investment diversification.

Positive

• Regulatory approval received for acquisition of CIFM, enhancing JPMAM's position in China.
• CIFM assets under management valued at approximately 170 billion RMB (USD 23.9 billion).
• Strategic integration of local expertise with JPMAM's global capabilities to boost investment solutions.

Negative

• None.

NEW YORK, Jan. 20, 2023 /PRNewswire/ -- J.P. Morgan Asset Management (JPMAM) announced significant steps in advancing its long-standing commitment to expanding in China.  

JPMAM has received regulatory approval from the China Securities Regulatory Commission (CSRC) to complete its acquisition of China International Fund Management Co., Ltd. (CIFM). CIFM will be operating under the JPMAM brand in China (JPMAM China), reflecting its integration into the firm's global operating model.  

JPMAM's Asset Management Wholly Foreign-Owned Enterprise (AM WFOE) will be integrated into JPMAM China, reflecting the firm's consolidated onshore operations. All CIFM employees will also eventually relocate to join J.P. Morgan at Shanghai Tower, an iconic building in the Lujiazui Financial Zone in Pudong District, the center of Shanghai's financial industry. CIFM Chief Executive Officer Eddy Wong will become Chief Executive Officer, J.P. Morgan Asset Management China, reporting to Dan Watkins, Asia Pacific Chief Executive Officer, J.P. Morgan Asset Management.

"Receiving regulatory approval to acquire full ownership of a Chinese fund manager is an incredibly exciting milestone that reflects our long-term mind-set and the breadth of our commitment to China. Our scale and global capabilities will enable us to help Chinese investors strengthen their investment solutions and diversify internationally, as well as to bring foreign investment and capital to China," said Mary Callahan Erdoes, Chief Executive Officer, J.P. Morgan Asset & Wealth Management.

"Having worked hand-in-hand with CIFM since co-founding it 18 years ago, and having been a key part of the growth of that business to today overseeing client assets of approximately 170 billion RMB (USD $23.9 billion)[1], we're thrilled to now fully combine CIFM's strengths with our international investment capabilities to serve both domestic China and global investors," said George Gatch, Chief Executive Officer, J.P. Morgan Asset Management.

"We believe integrating the strengths of CIFM's local operating expertise with the resources and global scale of J.P. Morgan creates powerful momentum. Our strategic goal is to significantly grow JPMAM China to become the leading foreign asset manager in China and contribute to JPMAM becoming the leading manager of China assets to global investors," said Dan Watkins, Asia Pacific Chief Executive Officer, J.P. Morgan Asset Management.

"This milestone is the culmination of years of dedicated collaboration and we would like to thank our joint venture partners for their incredible support. Shanghai Trust and its shareholder Shanghai Pudong Development Bank (SPDB) have made enormous contributions to CIFM since inception and we look forward to maintaining an extremely strong working relationship. As part of China's long-term financial liberalization reforms, Chinese regulators and Shanghai Municipal Authorities have been instrumental in developing the framework for foreign entities to become full participants in China's rapidly developing asset management industry," said Paul Bateman, Chairman, J.P. Morgan Asset Management.

"We are delighted to formally become part of the J.P. Morgan family.  As we build on CIFM's well-established presence and onshore expertise, we are committed to providing both Chinese and international clients with a comprehensive suite of investment solutions, underpinned by outstanding investment performance, industry-leading investment products, and excellent client service. We will also pursue investor education initiatives leveraging our market insights, to help investors make well-informed decisions for their long-term financial futures," said Eddy Wong, Chief Executive Officer, J.P. Morgan Asset Management China.

About J.P. Morgan Asset Management

J.P. Morgan Asset Management, with assets under management of USD 2.45 trillion (as of 31 December 2022), is a global leader in investment management. J.P. Morgan Asset Management's clients include institutions, retail investors and high net worth individuals in every major market throughout the world. J.P. Morgan Asset Management offers global investment management in equities, fixed income, real estate, hedge funds, private equity and liquidity.

JPMorgan Chase & Co. (NYSE: JPM) is a leading global financial services firm with assets of USD 3.7 trillion (as of 31 December 2022) and operations worldwide. The Firm is a leader in investment banking, financial services for consumers and small businesses, commercial banking, financial transaction processing, and asset management. A component of the Dow Jones Industrial Average, JPMorgan Chase & Co. serves millions of customers in the United States and many of the world's most prominent corporate, institutional and government clients under its J.P. Morgan and Chase brands. Information about JPMorgan Chase & Co. is available at www.jpmorganchase.com.

About J.P. Morgan Asset Management in China

We have a long-term commitment to building and maintaining an industry-leading presence in this important market.

• We co-founded our onshore joint venture China International Fund Management (CIFM) in 2004.
• We were one of the first foreign managers to establish an Asset Management WFOE in 2016, in the Shanghai Free-Trade Zone.
• We formed a Strategic Partnership with China Merchants Bank in 2019 to act as a preferred product provider to its asset management subsidiary, CMB Wealth Management. In March 2021, we announced a strategic investment of approximately 2.67 billion RMB ($410 million USD) in CMB's asset management subsidiary, CMB Wealth Management Co., Ltd. (CMBWM). This transaction was approved by the China Banking and Insurance Regulatory Commission (CBIRC) in December 2021.
• We have offered China A-Share equities funds to our clients internationally since 2006.
• We have a record six mutual funds approved for northbound distribution in the Mainland-Hong Kong Mutual Recognition of Funds scheme, with an industry-leading market share in the program.
• For many years we have been significant participants in China's QDII, Shanghai – Hong Kong Stock Connect, QFII and RQFII programs

JPMAM is well-positioned to provide China's institutions and individuals with world-class asset management services as the country's economy continues to grow and capital markets continue to open up.

¹ As of 30 September, 2022

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SOURCE J.P. Morgan Asset Management

FAQ

What did J.P. Morgan Asset Management announce on January 20, 2023?

J.P. Morgan Asset Management announced that it received regulatory approval from the China Securities Regulatory Commission for its acquisition of China International Fund Management Co., Ltd.

What is the significance of the acquisition of CIFM by JPMAM?

The acquisition enables CIFM to operate under the JPMAM brand in China, enhancing its integration into JPMAM's global operating model.

How much assets does CIFM manage?

As of now, CIFM oversees approximately 170 billion RMB, equivalent to USD 23.9 billion.

What is J.P. Morgan's goal for its operations in China?

J.P. Morgan aims to make JPMAM China the leading foreign asset manager in China, bringing investment and capital to the region.