Manulife Is Said in Talks to Buy Full Control of Chinese JV

Manulife Financial Corp. is planning to seek full control of its mutual fund joint venture in China to expand in one of the world’s fastest-growing wealth markets, according to a person familiar with the matter.

The Toronto-based insurer is in talks to buy the 51% stake being sold by partner Teda Investment Holding Co., the person said, requesting not to be identified because the matter is private. The stake would cost at least $272 million, according to an auction statement on Wednesday.

The Canadian firm, which owns 49% of the joint venture, declined to comment in an emailed statement. Teda didn’t immediately respond to a request for comment after business hours. It’s unclear whether any other prospective buyers have expressed interest in Teda’s stake.

Manulife shares rose 0.1% to C$24.43 as of 9:36 a.m. in Toronto.

Manulife would join BlackRock Inc. and JPMorgan Chase & Co. in their pursuit of wholly-owned mutual fund companies in a market where retail public funds alone could reach $3.4 trillion by 2023, according to Deloitte LLP. Manulife is seeking to increase its Asian insurance and wealth businesses to 50% of earnings by 2025, up from 41% last year.

The joint venture, known as Manulife Teda Fund Management, had 910 million yuan ($140 million) in total assets as of December. It generated 40 million yuan in profit for the year, according to a filing.

A raft of foreign asset managers are racing to expand in China’s retail wealth business. Goldman Sachs Group Inc. received approval to set up a wealth management joint venture with an arm of Industrial & Commercial Bank of China Ltd. in May.

Firms are taking multiple approaches, building wholly-owned mutual fund businesses and setting up wealth joint ventures to break into the market. BlackRock became the first foreign asset manager allowed to start a wholly-owned mutual fund business in June, just a month after it was given the nod to pursue a joint venture with China Construction Bank Corp. and Singapore’s Temasek.

JPMorgan is also placing its eggs in more than one basket. The bank said it would invest $410 million for a 10% stake in China Merchants Bank Co.’s wealth management unit. That’s in addition to its plan to buy out its Chinese counterpart in a joint venture known as China International Fund Management. Both deals are pending regulatory approval.

©2021 Bloomberg L.P.

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