Exclusive: Barclays seeks to enter China’s $4.3 billion asset management market

The Barclays logo is seen in front of the stock chart displayed in this illustration taken June 21, 2017.

Barclays is looking for a Chinese banking partner to set up an asset management joint venture in the country, two people with knowledge of the matter have said, as part of the British lender’s plans to expand its presence in the world’s second-largest economy. .

The asset management business in China, majority-owned by Barclays, will be created through its Barclays Investment Managers (BIM) unit, which currently has operations in Europe and Japan, the sources said.

If successful, Barclays will join a series of other Western financial firms that have started or are in the process of launching operations in China’s lucrative $4.3 trillion bank-dominated asset management market. .

The China expansion plan also comes as Barclays gradually expands its presence in Asia, reversing a decline in the region six years ago when it exited its cash equity business and sold its wealth management units in Singapore. and Hong Kong.

The London-based bank recently hired Cherry Zhu in Shanghai to develop BIM business in China, a third source said.

According to her LinkedIn profile, Zhu, previously a Singapore-based sales director at Northern Trust Asset Management, did not immediately respond to a request for comment.

The sources could not be named as they were not authorized to speak to the media.

Barclays declined to comment specifically on Reuters’ question about its planned asset management joint venture in China, but said it had expanded its presence in the country.

“The bank has strengthened its cross-border merchant and investment banking platform in China, expanding with a gradual and measured approach,” a bank spokesperson said in a statement.

In 2019, China allowed foreign firms to form majority-owned asset management joint ventures with the wealth management units of local banks, giving Western companies greater access to its huge financial sector.

Goldman Sachs and BlackRock began operating asset management joint ventures in China established with Industrial and Commercial Bank of China and China Construction Bank last month and in May 2021, respectively.

Europe’s largest asset manager, Amundi, has raised more than $11 billion in assets from Chinese investors since becoming the first foreign-owned joint venture to launch operations there in September 2020.

EXPANSION IN ASIA

Barclays managed $9.9 billion in retail fund assets at the end of June across more than 110 funds managed by its wealth management and investment units, according to Morningstar data.

BIM’s products, however, are primarily aimed at institutional investors, according to the company’s website.

China’s plans come as Barclays, Britain’s third-largest bank by market value, undertakes a broader rebuild of its presence in Asia.

In May, Barclays nearly doubled its stake in Barrenjoey Capital Partners to help grow the Australia-based investment bank’s business.

In January this year, the lender injected $105 million in operating capital into its Shanghai branch bank, according to business registration records, up from a previous increase of $75 million.

The bank is also boosting its corporate and investment banking capabilities in China as it capitalizes on the growing need for Chinese clients to tap into global capital markets and access cross-border advisory services, the bank said. second source.

Barclays declined to comment on the capital injection into Shanghai, as well as its plans to expand into cross-border markets and advisory services.

In its latest annual report, Barclays said China was one of the international markets where it aims to expand its business presence in corporate and investment banking, along with the Middle East.

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