US-based J.P. Morgan Asset Management (JPMAM) announced that it has reached an agreement with Shanghai International Trust (Shanghai Trust), a subsidiary of Shanghai Pudong Development Bank, to take a 100% ownership stake in China International Fund Management (CIFM).

The deal if approved by the China Securities Regulatory Commission would make it the first foreign firm to own a 100% stake in a Chinese fund manager and go a long way to showing the willingness of China to open its financial markets to foreign firms.

CIFM, which has more than 150 billion yuan in assets under management as of December 31 2019, is one of the leading Sino-foreign joint ventures (JV) in China’s asset management industry. The firm was formed in 2004 as a partnership between Shanghai Trust and JPMAM. 

Both firms have had several rounds of discussions on a staged equity transfer process. JPMAM has US$2 trillion in assets under management as of December 31 2019.

“We welcome China’s removal of foreign ownership restrictions, enabling us to deepen our long-term involvement with CIFM to 100% ownership, in alignment with China’s laws and regulations and with the full agreement of our JV partners, with whom we have worked very closely and collaboratively over the last fifteen years,” said Dan Watkins, JPMAM’s chief executive officer, Asia-Pacific.