UBS may buy up to 49 per cent of a Chinese asset management company, according to local reports. Such an acquisition would take the Swiss bank into the $40 billion Chinese fund management market for the first time.
UBS is expected to become the foreign partner of China Asset Management Co. Ltd., according to the official Shanghai Securities News, which cited “authoritative sources” within the company.
UBS said in November it was aiming at acquisitions or joint ventures in China, where the savings market is estimated at $1.5 trillion.
China Asset Management has about 20 billion yuan ($2.4 billion) under management. It was one of the first asset managers set up in the country.
UBS is already trading Chinese yuan-denominated equity and debt securities, under a special programme that grants limited access to foreign firms. The bank has also secured approval to set up a venture with Huarong Asset Management to dispose of non-performing assets.
UBS is a latecomer to the Chinese funds market by comparison with AIG, Allianz , ING and Societe Generale, who entered the market in the 1990s.
But the market may be less attractive than it seems: the Shanghai composite index slid 15 percent in 2004, to become Asia’s worst performing market last year.
Merrill Lynch’s maiden mutual fund in China raised a disappointing $130 million late last year, which was less than half the amount hoped for.