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Old Mutual is an international savings and wealth management company based in the UK. Fortis is a Belgian-Dutch international provider of banking and insurance services to personal, business and institutional customers. ABN Amro Teda Fund Management is a major asset management company in China that was founded in 2002. It is 49% owned by ABN Amro Asset Management (Asia) û which was recently acquired by Fortis û and 51% owned by a mainland company controlled by Teda Investment Holding, which is owned by the city of Tianjin. As of June 30, ABN Amro Teda Fund Management had an AUM of around Rmb21.1 billion ($3.1 billion).
The sale is the result of regulatory compliance following Fortis's acquisition in April 2008 of the asset management business of ABN AMRO Group, and is subject to approval by the China Securities Regulatory Commission (CSRC) and relevant government authorities.
Lex Kloosterman, a member of the Fortis Group executive committee and responsible for asset management, says the firm had to sell one of two asset management companies in China û Fortis Haitong Fund Management or ABN Amro Teda Fund Management.
ôTeda supported the choice of Old Mutual as a buyer for ABN Amro Teda Fund Management and Old Mutual is committed to further developing the company,ö says Kloosterman.
Steffen Gilbert, Old Mutual's Asia-Pacific president, says the joint venture with Teda Investment Holding will play a significant role in developing the group's international strategy.
"This is a rare opportunity to buy a sizeable stake in a well-established and well-managed asset management business in the region,ö Gilbert says.
China allowed sino-foreign fund management joint ventures in 2002. Foreign ownership was first capped at 33% and then later relaxed to 49%. Many of the mainlandÆs most lucrative asset management and securities firms were grabbed by the worldÆs largest fund houses within the first few years, but there are still holdouts. China is widely considered a lucrative fund market because of the untapped potential from the more than $2 trillion in personal savings tucked away in low-yielding bank deposits. One study by McKinsey projects that China will be the fastest growing fund market in the world, with its AUM increasing to around $1.4 trillion by 2016.
This latest partnership establishes Old Mutual's presence in the Chinese asset management market and lays the foundations for the groupÆs further expansion in Asia.
For its part, Old Mutual says it will bring high levels of innovation and product development as well as global and emerging market fund management expertise and training to the joint venture.
The transaction will not have a material impact on FortisÆs net profit per share and is expected to provide solvency relief of around half of the cash consideration for the purchase.
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