Joint-venture KBC Goldstate has hired Zhang Jiabin as general manager to rebuild the firm’s fortunes after his predecessor quit following a period of underperformance, AsianInvestor understands.

Zhang officially started at the fund management company on March 1 following Yi Qiang’s departure on February 24, sources suggest.

Previously Zhang worked as general manager at Minsheng Royal FMC from November 2008 to January 2011. Prior to that he was COO at China Everbright Asset Management (HK), chief marketing officer at Citic Prudential FMC, and marketing director at Fullgoal FMC.

GoldState Securities, which owns 51% of the JV, and KBC (49%) will be hopeful that Zhang can help to turn around the company, which suffered a 60% drop in assets under management last year to $197 million.

It is understood this heaped pressure on Yi to resign, although he could not be reached for comment by press time.

“There was quite a lot of talk between [Zhang] and the two shareholders, who both have quite a positive outlook on him to turn around what was not going well before,” says a source.

Minsheng Royal FMC has launched six mutual funds since March 2009 – three equity, two fixed income and one balanced fund – and has Rmb3.7 billion ($563 million) in AUM as of March 11. Its funds have achieved stable performance, with NAV swinging around Rmb1 per share.

According to a company filing released last week, KBC Goldstate has named its chief financial officer Kuang Xiaoxing as acting general manager. The China Securities Regulatory Commission (CSRC) requires that senior fund managers do not disclose which firms they are joining within three months of leaving a post, meaning KBC Goldstate cannot announce Zhang’s appointment yet. Accordingly a company spokesman declined to confirm his hire.

Yi also vacated the position of CIO, in which he was acting after former CIO Lode Vermeersch moved over to become COO last March. It is understood the firm is now looking for a CIO.

Having joined a KBC Goldstate preparation team in 2005, Yi helped to establish the firm in 2006 and has been general manager ever since. Previously he took care of regional business development for KBC Asset Management and has also worked as director of business development for China Merchant FMC.

Despite an operational life of over four years, KBC Goldstate manages just six mutual funds – one bond, two balanced and three very small equity products, only one of which remains large enough to be consistently profitable, notes consultancy Z-Ben Advisors. KBC Goldstate has no presence in faster-growing qualified domestic institutional investor, exchange-traded fund or index products.

It has been reported that KBC plans to sell its 49% share in the JV. The Belgian bancassurance group closed its Shanghai representative office in 2009 and is selling off its global project finance business.

Goldstate Securities was awarded the second-lowest rating (CC) for securities companies by the China Securities Regulatory Commission. Since November 2006, Goldstate Securities has sent three senior managers, each with more junior titles, to be chairman of the board of directors of the company.