Chinese regulators awarded J.P. Morgan Asset Management a business license to set up a wholly owned asset management firm, J.P. Morgan Asset Management (Shanghai) Ltd., in Shanghai’s free trade zone.
In a news release Tuesday, the firm said Desiree Wang, JPMAM’s Hong Kong-based head of China and chairman of investment management China executive committee, will be the new unit’s legal representative. A Hong Kong-based spokesman said it’s not clear yet whether Ms. Wang will relocate to Shanghai.
The news release said JPMAM becomes the first foreign player to garner an “asset management wholly foreign-owned enterprise” license.
A handful of other high-profile foreign firms — including Aberdeen Asset Management, Fidelity International and Bridgewater Associates — have received “investment management” wholly foreign-owned enterprise licenses, and it wasn’t immediately clear if the scope of business allowed differs in any significant way.
Michael Falcon, JPMAM’s Hong Kong-based CEO global investment management Asia-Pacific, said in an interview the license paves the way for JPMAM to build a strong local asset management operation, strengthening all three prongs of JPMAM’s China business: providing Chinese investment products to domestic investors; providing regional and global strategies to those investors; and providing Chinese investment strategies to the rest of the world.
Mr. Falcon said China International Fund Management Co., the 49% to 51% joint venture JPMAM launched with Shanghai International Trust & Investment Co. 13 years ago, will remain the “core of our business in China,” and a source of “continued big opportunities for us.”
For now, JPMAM’s new license provides a means of supporting that joint venture and all of the other access points the money manager is exploiting now, including China’s qualified foreign institutional investor and renminbi qualified foreign institutional investor programs, the Shanghai-Hong Kong stock connect program and the Shanghai-Hong Kong mutual recognition fund program, he said.
“China, for all its challenges and uncertainties, represents a major opportunity,” as a huge population of long-time savers increasingly becomes a population of investors, said Mr. Falcon.
To increasingly be able to field local sales people on the ground in China will aid JPMAM’s retail and institutional business in that country, he said.