US-based private equity firm Warburg Pincus has reportedly secured the regulatory approval to acquire a 23.3% stake in Chinese investment manager Zhong Ou Asset Management.
China’s Securities Regulatory Commission (CSRC) has granted the approval.
The US private equity firm company is buying the stake from Italian private banking company Intesa Sanpaolo Bank, for a total of CNY51.26m ($7.48m), reported Reuters.
Once the acquisition is completed, Warburg Pincus will become the biggest institutional shareholder in Zhou Ou, said the publication.
Warburg Pincus managing director Ben Zhou said: “Zhong Ou AMC has built up a strong business over the years through its outstanding investment and research capabilities, market-based operation, and strong distribution channels.
“Warburg Pincus has over 57 years of experience in the global asset management industry and can assist Zhong Ou AMC in its future development.”
Zhong Ou had assets worth CNY350.8bn in its public funds, as of September last year, excluding money market products.
With the acquisition of Zhong Ou, Warburg Pincus is positioned to expand its footprint in the Chinese mutual fund market, where it already owns a 29% stake in Hwabao WP Fund Management.
The announcement comes as the CSRC is speeding up application approvals for foreign financial institutions that will increase their investments in local units.
It follows recent regulatory approval for Morgan Stanley, JPMorgan, and Manulife Financial, to obtain full ownership of their Chinese mutual fund ventures.
