JPMorgan’s latest China deal – a direct investment in the wealth management arm of China Merchants Bank – is a timely reminder, not just of the vast untapped potential in the onshore private wealth space, but also the value of thinking long term in Asia’s largest economy.
The deal announced on March 19 will see JPMorgan Asset Management (Asia Pacific) buy a 10% stake in CMB Wealth Management, for Rmb2.7 billion ($415 million), with the remainder to be owned by the Shanghai- and Hong Kong-listed lender. It has yet to be approved by China’s banking and insurance regulator.
The US bank is carefully accumulating the medley of licences it needs to be a diversified onshore financial power.
In November, it raised its stake in JPMorgan Securities (China), its broking joint venture, from 51% to 71%, after buying out one of its local partners. The new outfit, which only opened its doors in March 2020, houses its domestic investment banking, research, fixed income and equities businesses.
We are aiming to have our full suite of global products and services to be delivered on the ground in China one day
Mark Leung, JPMorgan China
It also owns a 51% stake in China International Fund Management, the mutual fund management venture it formed with co-owner Shanghai International Trust in 2004, and has plans to spend up to $1 billion to buy out its partner.