British asset manager Abrdn is in advanced discussions with Citic Bank to establish an asset management joint venture (JV) in China.
The talks could see Abrdn taking a majority stake in the partnership with Citic Bank’s wealth management unit, Citic Wealth, reported Reuters.
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This comes as some Western financial institutions have scaled back their Chinese operations due to economic concerns and geopolitical tensions.
Citic Wealth, which manages around CNY2tn ($275bn), is claimed to be the third-largest bank-owned wealth management unit in China.
The JV, pending regulatory approval expected to be sought later this year, would bolster Abrdn’s existing Chinese engagements, including a 50-50 insurance JV and a private fund unit established in 2015.
The discussions between Abrdn and Citic Bank have been ongoing for the last couple of years, exploring options for collaboration in mainland China.
These talks have been reinvigorated by recent economic and financial dialogues between China and the UK, which resumed last month after a nearly six-year hiatus.
If successful, this would be the second such collaboration between a Chinese bank-owned wealth unit and a British firm, following the establishment of a majority-owned venture between Schroders and Bank of Communications in 2021.
Despite the challenges faced by China’s wealth industry, including intense competition and a significant decline in the benchmark CSI300 stock index, the partnership could offer Abrdn a competitive edge in this market.
In May 2024, abrdn and wealth management platform FNZ partnered to launch a multi-distributor, open-architecture digital wealth platform in Asia, starting with Singapore.
