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Money Management

JPMAM inches closer to a controlling stake in China joint venture

Shanghai International Trust Co. has put 2% of its 51% stake in China International Fund Management, the joint venture it launched with J.P. Morgan Asset Management (JPM) in 2004, up for bid, opening the door for JPMAM to become the first foreign JV partner to take a controlling stake in a mainland fund management company.

Just under a year ago, JPMAM said the firm's "desire and intent is to increase its (49%) joint venture stake ... to a majority interest, subject to agreement with its joint venture partner and the relevant authorities."

A Shanghai International Trust stock exchange filing Tuesday said the bidding period for the 2% stake would extend from May 8 through June 4.

One Shanghai-based research analyst, who declined to be named, noted that regulations require state-owned companies, such as Shanghai International Trust parent Shanghai Pudong Development Bank, to employ a public auction process to dispose of stakes.

The move, coming at a moment of heightened U.S.-China trade tensions, marks the start of the "whole process of foreign majority ownership" for Chinese fund management companies, he said.

A Hong Kong-based spokeswoman for J.P. Morgan Asset Management declined comment.