After a long struggle that started in April last year, a 49% stake in China joint venture ABN Amro Teda Fund Management has finally found a new owner. Canadian insurance group Manulife said yesterday it has signed an agreement with Fortis Bank -- now part of French bank BNP Paribas -- to buy the holding for €105 million, subject to approval by the China Securities Regulatory Commission.

The deal will be paid with cash and marks a triumph for Manulife, which has steered a relatively clear course through the crisis.

The insurer has sought to take advantage of its strong balance sheet to do deals this year, in anticipation that there will be regulatory calls to strengthen capitalisation in the future. Whereas past bidders such as South Korea's Mirae have now changed strategies to pursue greenfield opportunities, Manulife chose a big firm like ABN Amro Teda to give itself a head-start in the Chinese market.

The acquisition of the China joint venture will complete Manulife's quiet transformation as a pan-Asian asset manager, adding to its existing businesses in Hong Kong, Indonesia, Malaysia, the Philippines, Singapore, Taiwan and Thailand. (It added the Taiwan subsidiary in January through a $29.6 million buyout of Fuhwa Securities Investment Trust.) As of the end of September, the firm sourced $38.3 billion from investors in the region and managed $13.5 billion of assets on the ground.

Now the deal is signed, gaining regulatory approval will require waiting; the CSRC is expected to start clearing its backlog of approvals for JVs from next year. As the first foreign company in China to operate an insurance JV since 1996, Manulife has positioned itself as a true long-term participant in the country. It has won the blessing not only of the Chinese shareholder, Teda, but also of the venture's own management, which had the power to veto the deal.

The insurer sees in ABN Amro Teda a company whose management team has done well over the years, says Thomas Cheong, Shanghai-based vice-president for China asset management at MFC Global Investment Management, Manulife's asset management division. Manulife will seek to share resources between the JV and its Hong Kong-based investment team in Greater China strategies, as qualified foreign institutional investor (QFII) quotas become available in the future. But Manulife does not intend to make changes to the team.

The management and investment staff will be left intact and independent, with general manager Miao Junwei and chief investment officer Liu Qingshan at the helm. Cheong, a recent hire from another insurance-affiliated JV, Citic Prudential Fund Management, is in China to help manage the transition process. (At Citic Prudential he had been chief financial officer, chief operating officer and interim chief executive before Jimmy Wang took over.)

Cheong sees the resolution of uncertainty over the stakeholding as an important first step to expanding the company's business as a fully fledged asset management shop.

Manulife takes a long-term view on developing its business in China's pension market. However, Chinese regulations dictate that insurance and asset management remain independent businesses. Until the rules are relaxed, the JV will not be able to manage general account investments or source assets from investment-linked policies from the insurance operation.

Cheong says ABN Amro Teda's book of asset management business is sizeable. The firm manages Rmb25.96 billion ($3.8 billion) of assets and is now 30 on the list of largest companies in the domestic industry. He expects the deal to generate profit for Manulife from day one.

Both Manulife and Teda, the Chinese shareholder with a 51% stake, both say they intend to hold their stakes for the long term.

The firm had already undergone three rebrandings in its seven years in business, having begun life as Xiangcai Hefeng Fund Management in 2002. The founding shareholders had been Xiangcai Securities (40%), Shandong Xinying Holdings, PetroChina's Daqing oilfield subsidiary and Xinjiang Securities.

The firm became a foreign JV in 2003, when ABN Amro Asset Management, as advisor to its first fund launch, bought a 33% stake. ABN's stake was later boosted to 49%. By 2006, Xiangcai Securities' close brush with bankruptcy forced its exit and it brought in Teda, an investment subsidiary controlled by the Tianjin city government.

In addition to ABN Amro and Fortis Bank, South African insurer Old Mutual and BNP Paribas have also come into the equation, before being forced to sell.

At €105 million, the price Manulife is paying for the stake is significantly lower than the original €165 million that Old Mutual agreed to pay in August 2008 (before it revoked the deal in April). But the sale clears the way for BNP Paribas to sell its next China JV -- SYWG BNP Paribas Asset Management.

Insiders say that, after the sales, the French bank will retain just one holding -- its stake in Fortis Haitong Investment Management.