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ABN AMRO Asset Management's move is straightforward. It has boosted its stake in its China fund management joint venture by taking up a 16% stake held by Xiangcai Securities. This brings ABN AMROÆs interest in the joint venture to 49%, the maximum threshold foreign investors are allowed to take in a fund management joint venture in China.
The new partner aspect of the deal is slightly more complex. The Tianjin Municipal Government investment arm, Tianjin TEDA Holdings, through its subsidiary Northern International Trust & Investment, has acquired a 51% stake in the joint venture from Xiangcai Securities, which formerly held 67% in the joint venture. Northern International Trust is a comprehensive, PeopleÆs Bank of China approved non-banking financial institution.
Neither ABN AMRO Asset Management nor Tianjin TEDA Holdings would comment on how much they paid for their stakes.
Established in 2003, ABN AMRO TEDA (formerly known as ABN AMRO Xiangcai) was
one of the first Sino-foreign joint ventures to enter the Chinese fund management market.
"WeÆre delighted with our partnership with Northern International Trust and Tianjin TEDA. The
combination of their strong local network and our international network and fund
management expertise will help this joint venture to take another great leap forward,ö says Alex Ng, greater China CEO of ABN AMRO Asset Management.
Ng added that the joint venture will be in an excellent position to service QFII, the pension market in China. ABN AMRO TEDA currently serves as the investment advisor to the ABN AMRO China A-share Fund.
Today, ABN AMRO TEDAÆs assets under management exceed Rmb11 billion. As of end of April 2006, all its existing funds (established within the past three years) had recorded positive returns, with its four equity funds recording returns of between 48%-68% since their inception.
The AU$85 billion ($61.6 billion) Australian super fund has some exposure to indebted property developer Evergrande. Meanwhile, China’s construction finance is part of its core strategy in real estate.
Investors are seeing the risks, but also the opportunities of the logistics sector. Warehousing their fears for the moment, they can see it's a good conduit to high-growth assets.
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