China International Capital Corp., a Beijing-based investment bank, will acquire a 50.1% stake in Krane Funds Advisors, the New York-based provider of the China-focused KraneShares exchange-traded fund series.
Financial terms of the deal weren't disclosed.
Acquiring just more than half of Krane Funds Advisors will mark CICC's "first step" in building on its extensive Greater China money management operations to establish global capabilities, said Elaine La Roche, a New York-based spokeswoman for CICC, in a telephone interview.
A 50.1%-49.9% split lays the foundation for a true partnership between the two companies "to grow the business together," as investment flows — both institutional and retail — between the U.S. and China "grow dramatically in coming years," she said.
Brendan Ahern, KraneShares' chief investment officer, said being able to leverage CICC's network on the mainland, Hong Kong and London should "greatly accelerate" a Krane ETF business that's already tripled year to date, to roughly $750 million in assets under management, as China's equity and bond markets moved closer to inclusion in global benchmark indexes.
Mr. Brendan, in a separate interview, said in partnership with CICC, his firm's ETF and asset allocation-focused managed account capabilities will focus on serving both the inevitable pickup of overseas investors seeking exposure to China's capital markets and the growing ranks of investors in China looking to diversify overseas.
Hong Kong-listed CICC, founded in 1995 by China Construction Bank and Morgan Stanley, counts $814 billion Beijing-based sovereign wealth fund China Investment Corp., Singapore sovereign wealth fund GIC and private equity firms TPG and KKR & Co. as shareholders.
