Jack Ma-backed Yunfeng Financial expects to take at least a year to complete US$1.7b MassMutual’s Asian unit acquisition

Yunfeng says its YouYu Robo Advisor has so far signed partnerships with 15 asset managers including investment giants BlackRock, Pimco and AXA

PUBLISHED : Tuesday, 17 October, 2017, 12:19pm
UPDATED : Thursday, 19 October, 2017, 10:44am

Alibaba chairman Jack Ma-backed Yunfeng Financial Group, which is leading the US$1.7 billion acquisition of the Asian unit of Massachusetts Mutual Life Insurance, said it won’t complete the deal until the third quarter of 2018 due to the complex approval process involved.

“We hope to complete the transaction by this time next year, depending on shareholder and regulatory approval,” Li Ting, Yunfeng Financial’s chief executive told the South China Morning Post. “This is quite a long process.”

According to Li, the deal announced in August is pending a number of approvals, including shareholder approvals of the acquisition and Whitewash Waiver and approvals by Hong Kong Insurance Authority, the The Mandatory Provident Fund Schemes Authority, Monetary Authority of Macao and other bodies.

Hong Kong-based Yunfeng will own 60 per cent of MassMutual Asia. The rest will be owned by other investors such as Ant Financial Services, another affiliate of Alibaba, as well as Singapore sovereign wealth fund GIC Private, and Chinese internet firm, Sina Corp.

Yunfeng, formally the brokerage Reorient Group, has transformed itself into one of the city’s leading financial technology firms followed investment from Yunfeng Capital, a private equity firm set up by Ma, the chairman of Alibaba, and Chinese entrepreneur David Yu.

Li said the company had already obtained most licences they want from the Hong Kong Securities and Futures Commission (SFC) including Type 1, 4, 6 and 9, with “insurance-related licences the only one left to build our financial ecosystem”.

Once the deal is completed, Li said Yunfeng plans to put standard insurance products – such as medical – on its platform for online sales, as well as creating better tools for thousands of agents to sell the complicated life insurance products.

Yunfeng shook up the wealth management market in April this year by launching its robo advisor “Youyu Wealth”, a mobile app which helps select funds and offers other investment advice for retail Chinese and Hong Kong investors, looking to invest as little as US$80 for a single fund, and US$4,000 for a portfolio. It claims transaction fees are a fifth of traditional channels.

Li said the company is not a “market disrupter” but an “effective supplement”, as they offer services to the masses which are not the target of traditional banks.

Its robo adviser has so far signed partnerships with 15 asset managers including investment giants BlackRock, Pimco and AXA, and there are more than 300 mutual funds available on its platform.

But Li declined to disclose its actual number of users as the company is still in what she called a “rapid growth period”.

Many observers see Hong Kong as lagging behind other Asian regions such as Singapore and mainland China in the financial technology (fintech) revolution.

Li said Yunfeng has been working with the SFC and Hong Kong stock exchange (HKEX) in providing advice on fintech development and improving investor education.

Most recently it jointly organised a virtual stock competition with HKEX launched last week.

“It will be a long education process,” Li added, “but we hope to play a leading role in promoting fintech.”

Alibaba owns the South China Morning Post