Goldman Sachs scores deal to target Chinese wealth market

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Goldman Sachs Asset Management is to establish a wealth management joint venture in China, making it the latest foreign investment manager to tap sizeable opportunities to grow assets in the country.

GSAM will partner with the ICBC Wealth Management, a subsidiary of the Industrial and Commercial Bank of China, to offer investment products to Chinese investors, including quantitative investment strategies and alternatives.

GSAM, which oversees around $1.9tn globally, will hold a 51% stake in the new venture, which has received preliminary approval from the China Banking and Insurance Regulatory Commission.

The move was first reported by the Financial Times.

According to Goldman Sachs’ own research, investable assets held by Chinese households are set to pass $70tn by 2030, with about 60% of that allocated to “non-deposit products” including mutual funds and wealth management vehicles.

“China’s wealth management industry has grown on the back of increased household wealth and continued financial market reform,” said Tuan Lam, head of the client business for Asia Pacific ex-Japan at GSAM.

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“This joint venture with China’s preeminent financial institution will accelerate our objective of establishing a leadership position in one of the world’s largest, fastest-growing wealth management opportunities.”

GSAM is the latest in a string of asset managers to focus on building a presence in China.

Amundi, Europe’s largest asset manager, received regulatory approval to begin operations in mainland China in November 2020, nine months after it announced a joint venture with Bank of China’s wealth management arm, in which the asset manager holds a 55% stake.

The Amundi BOC Wealth Management Company was the first foreign majority-owned company in China allowed to design and offer wealth management products to Chinese retail investors.

Earlier this month BlackRock, the world’s largest asset manager, received the green light for a majority-owned wealth management joint venture, which includes China Construction Bank and Temasek, Singapore’s sovereign wealth fund.

READ Baillie Gifford opens Shanghai office to assist China push

Elsewhere Pictet Asset Management, the fund management arm of the Geneva-headquartered private bank and financial services group, announced in November it had opened an office in Shanghai.

Baillie Gifford, the Edinburgh-headquartered asset manager, also established an office in Shanghai last year.

Baillie Gifford’s global investment teams had previously been based in Edinburgh, but the firm said having a local presence will deepen existing relationships with Chinese companies and improve its understanding of cultural developments.

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