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December 2, 2009updated 13 Apr 2017 8:55am

Manulife buys into China’s asset management market

Canadian insurer Manulife Financial has secured itself an instant position in Chinas asset management market with the acquisition of French bank BNP Paribass 49 percent stake in ABN AMRO TEDA Fund Management Company (TEDA) for 105 million ($158 million) in cash.

By Stafford Thomas

Canadian insurer Manulife Financial has secured itself an instant position in China’s asset management market with the acquisition of French bank BNP Paribas’s 49 percent stake in ABN AMRO TEDA Fund Management Company (TEDA) for €105 million ($158 million) in cash.

“Our new partnership with TEDA provides a rare strategic opportunity to make a fast track entry into China’s large and high growth market for individual and institutional wealth management services,” said Manulife president and CEO Donald Guloien. “This accelerates our expansion in China’s huge growth market by several years,” he added.

According to Manulife, TEDA has assets under management (AuM) of CNY26 billion ($3.8 billion).

TEDA was formed in 2002 by former Belgo-Dutch bancassurer Fortis as a joint venture with Northern International Trust, a unit of Tianjin TEDA, a Chinese diversified investment company owned by the city of Tianjin. BNP Paribas gained control of TEDA this year as part of its acquisition of 75 percent of Fortis Bank from the Belgian government.

TEDA, to be renamed Manulife TEDA Fund Management Company, will fall under Manulife’s asset management arm MFC Global Investment Management. With the acquisition, MFC Global will have asset management companies in nine of the 10 Asian territories, including China, in which Manulife has insurance operations.

MFC Global has total institutional and retail AUM of over $100 billion, including $13.5 billion for Asian clients.

Underscoring attractions of the deal, Manulife said figures supplied by the China Securities Regulatory Commission show 30 June 2009 China’s asset management industry had AUM of $338 billion; a total consultancy Z-Ben Advisors forecasts to exceed $1 trillion by 2014.

A big driver of growth is expected to be a shift of household wealth from banks to the asset management industry. Citing 2007 data from reinsurer Swiss Re, Manulife noted that 88 percent of personal assets in China are held in deposits.

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