Morgan Stanley Investment Management gained approval from the China Securities Regulatory Commission to take full ownership of its mutual funds joint venture in China.
The investment management firm, which has $1.3 trillion in assets under management, announced on Feb. 3 that it will take a full controlling stake, up from a 49% stake, in Shenzhen-based Morgan Stanley Huaxin Funds.
Morgan Stanley Huaxin Funds was a joint venture formed in June 2008 that provides retail and institutional investors access to mutual funds and segregated management accounts.
In response to queries about how much the purchase price was, a spokeswoman said that Morgan Stanley agreed to purchase a 36% stake from Huaxin Securities in May 2021 at 389 million yuan ($61.1 million) through a public auction. The firm also reached an agreement to purchase the remaining 15% from CoStone Capital, also in 2021, for an undisclosed sum, the spokeswoman said.
"The firm has been active in China for almost three decades and we are committed to our goal of building a fully integrated financial services firm to meet the evolving needs of domestic and global clients. Today's announcement is an important strategic milestone along this path," Gokul Laroia, CEO of Asia-Pacific at Morgan Stanley, said in the statement.
"With high levels of wealth creation, growing demand for financial advice, and with the launch of a private pension scheme, we see long-term opportunities in China's asset management industry," Mr. Laroia said.
In recent months, Chinese regulators have sped up approvals for foreign asset managers to take over their Chinese joint venture firms. Most recently, on Jan. 19, J.P. Morgan Asset Management was given the greenlight to acquire full ownership of its Shanghai-based joint venture.
