Goldman Sachs, ICBC to form China wealth management joint venture
- Goldman Sachs Asset Management to own 51 per cent of new joint venture
- Chinese regulators have granted preliminary approval for the venture with ICBC Wealth Management
The joint venture will develop a broad range of investment products for the China market over time, including but not limited to, quantitative investment strategies, cross-border products and innovative solutions in alternatives, according to Goldman.
“China’s wealth management industry has grown on the back of increased household wealth and continued financial market reform,” said Goldman Sachs Asset Management’s Tuan Lam, whose responsibilities include client management across Asia Pacific excluding Japan.
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The China Banking and Insurance Regulatory Commission has granted preliminary approval for the establishment of the joint venture.
The first products could be introduced by the joint venture as soon as next year depending on final regulatory approval.
The securities joint venture, Goldman Sachs Gao Hua, was started in 2004, but Goldman has operated in the Chinese capital markets since the 1990s. The bank is waiting on final approval from regulators to complete the securities joint venture deal.
Asia accounted for 14 per cent of Goldman’s revenue in 2020, or US$6.2 billion, and 3 per cent of its pre-tax profit, or US$419 million.
Goldman and other foreign lenders are racing to bulk up their presence in the mainland after Beijing eased rules on foreign ownership in the financial services sector.
One key reason: investible assets held by Chinese households are set to surpass US$70 trillion by 2030, with about 60 per cent allocated to securities, mutual funds and wealth management products, according to Goldman Sachs investment research.