Vanguard and Ant Group are reportedly planning to inject capital in their Chinese joint venture (JV) robo advisory, which offers offer wealth management services to Chinese individual investors.
The companies are in discussion to raise the total registered capital in the joint venture to $23.4m (RMB 150m) from $7.75 (RMB 50m), Bloomberg reported citing people aware of the matter.
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Vanguard in a statement to the news agency said: “We believe in the power of financial advice to help investors achieve better investment outcomes, and are committed to our joint venture with Ant Group and our mutual goal to bring advice to millions of Chinese investors.”
Ant Group didn’t comment on the news.
Vanguard and Ant Financial Services formed the JV in 2019 to offer retail investment advisory services in China.
This JV utilises Alipay’s technological expertise and Vanguard’s advisory service capabilities to offer customised offering based on investor’s investment objectives, time horizon and risk preferences.
In March this year, Vanguard scrapped its plan to secure a mutual funds licence in China, marking an exception to the latest trend of financial firms rushing to grab a share of the market.
At the time, the firm cited a ‘crowded’ market as the reason behind its retreat and said it will focus on building out its robo-adviser JV in the country.
The venture allows the US asset manager to maintain its presence in the retail market, which is expected to grow to $3.4 trillion by 2023.
Recent developments at Vanguard
Last August, Vanguard Group revealed plans to close its operations in Hong Kong and Japan and to exit Hong Kong exchange-traded funds (ETF).
In March last year, the firm decided to merge the $770m Vanguard Capital Value Fund into the $17.6bn Vanguard Windsor Fund in a bid to streamline value fund lineup.
In January last year, the American asset manager secured approval from the UK’s Financial Conduct Authority (FCA) to launch a retail investment advice service in the UK.
