In March of this year, foreign private investment in Lubomai and Fudun was officially qualified to carry out investment advisory services in China, that is to say, they were qualified to invest, which formally opened the door of cooperation between foreign private equity and domestic banks.
On June 5, Pioneer Pioneer Investment Management (Shanghai) Co., Ltd. joined hands with the domestic Internet giant Ant Golden Clothing Layout domestic investment consulting business. According to Daily Economic News, Pioneer Pioneer Investment Management (Shanghai) Co., Ltd. is a wholly foreign-owned company established in Shanghai by Vanguard Group, the largest mutual fund company in the United States with a management scale of 5 trillion US dollars. How will this affect the local securities investment consulting industry?
Jointly Create Investment Consulting Company
Since the filing of the first foreign-funded private-equity product in May, 2017, the trend of foreign-funded management giants has been the focus of attention in the market.
On March 25, this year, according to the information of the Fund Industry Association, the status of whether to be a third party institution that meets the requirements of providing investment proposals in the filing information of foreign-funded private-equity Lubomai Investment Management (Shanghai) Co., Ltd. and Fudun Investment Management (Shanghai) Co., Ltd. has changed to: Yes. This means the emergence of the first foreign private equity firms that can provide investment advisory services.
On June 5 this year, Ma Yuns Ant Golden Clothes, together with Pioneer Pioneer Investment Management (Shanghai) Co., Ltd., set up a joint venture company to lay out the domestic investment consulting business market.
According to Tian Eye Check data, Pioneer Pioneer Consulting (Shanghai) Investment Consulting Co., Ltd. of the joint venture company was established on June 5, 2019 with a registered capital of 20 million yuan. Business scope is investment consultation. From the perspective of ownership structure, Zhejiang Ant Micro Financial Services Group invested 10.2 million yuan, with 51% of its shares. Pioneer Pioneer Investment Management (Shanghai) Co., Ltd. invested 9.8 million yuan, with 49% of its shares. The legal representative of the new company is Huang Hao, president and executive director of Zhejiang Netcom Bank Co., Ltd. and the general manager is Zhang Yu.
According to Daily Economic News, Pioneer Pioneer Investment Management (Shanghai) Co., Ltd. is a wholly foreign-owned company established in Shanghai by Vanguard Group, the largest US mutual fund company with a management scale of 5 trillion US dollars. Pioneer Pioneer was founded in the United States in 1975 and is currently the worlds largest public fund management company. In recent years, it has shared more than 80% of the net inflows from the U.S. mutual fund industry with BlackRock and Dow Global. In addition, Vanguard Group is not only the largest mutual fund in the United States, but also the earliest fund company to sell funds on the Internet. The Internet will undoubtedly become the most important platform for fund sales, and Ant Golden Clothing attracts the attention of domestic and foreign management giants precisely because of its huge traffic effect.
Opening up a New Way to Develop Chinas Market
It is worth noting that on March 25 this year, foreign private equity Lubomai Investment and Fudun Investment were officially qualified to carry out investment advisory services in China, which means that these two foreign private equity firms have officially been qualified to invest and become the first foreign private equity firms to obtain such qualifications. After pioneering the investment consulting business of Ant Golden Clothes Layout, it means that the business of foreign capital management giants in China is advancing in depth.
In 2017, Vanguard Group formally established the wholly foreign-owned enterprise (WFOE) - Pioneer Pioneer Investment Management (Shanghai) Co., Ltd. in Shanghai. Up to now, nearly 20 foreign capital managers entering the Chinese market have filed securities private placement managers, but Pioneer Pioneer Pioneer, unlike BlackRock and Fidelity International, did not apply for a private placement licence after Pioneer Pioneer set up a sole proprietorship company. Pioneer Pioneer did not issue any products in the Chinese market because the Chinese market did not formally open its sole proprietorship public offering licence to foreign investors.
At present, there are only two ways for foreign capital management giants to participate in the Chinese market. One way is to set up foreign private equity funds: foreign capital managers set up wholly foreign-owned enterprises (WFOEs), then apply for private equity managerslicences from China Fund Industry Association, and then search for securities firms, banks, tripartite wealth and other channels for non-public offering; the other way is to participate through equity participation, such as UBS assets have three products after obtaining the private equity licence, and hold 49% of the products at the same time. UBS shares of CITIC participate in Chinas public offering through this platform. Schroeder has invested in private equity products in China and holds a 30% stake in the Bank of Communications Schroeder Fund.
As more and more foreign investment institutions enter the domestic investment consulting market and compete with their local counterparts, how will this affect the local investment consulting industry?
In response, Liu Sishan, an investment consultant for Rongwei Securities, told Daily Economic News: Internet giant Ant Golden Clothes and the pioneer of foreign capital management giant pioneer set up a new joint venture company. Now it is only a business registration. Whether to obtain a securities investment consultation licence still needs the approval of China Securities Regulatory Commission. If the approval of CSRC can be obtained, the new company will have a huge advantage. The Internet giant Ant Golden Clothing has the advantage of customer resources, and the diversion effect is obvious.
Liu Sishan further pointed out: Vanguard Group, a giant foreign capital management company, is the largest mutual fund in the United States. It has the advantages of capital management and strong financial management ability, so it can be said to be a strong alliance. The establishment of the new company is a new measure to open up the securities consulting industry in China. It will impact the existing securities investment consulting industry. The market structure will be re-divided. Customers will face more choices and better services. The securities investment consulting industry will face more fierce competition. Some high-quality local companies may become dangerous, take advantage of the situation and further develop. Growth, and some weak local companies if not changed, rapid development, will face the danger of being eliminated.
Source: Daily Economic News Responsible Editor: Yang Bin_NF4368