Alipay buys fund manager to boost online services
The internet payment firm owned by Alibaba takes 51 per cent of Tianhong Asset Management
The online payment affiliate of dominant mainland e-commerce company Alibaba is taking control of Tianhong Asset Management to accelerate its push into online financial services.
Alipay and Tianhong launched a new fund and payment platform - called Yu E Bao, or "leftover treasure" in Chinese - in June to help Alipay customers convert spare cash into a money market fund holding.
In its first 18 days, the fund attracted more than 2.5 million customers and raised 6.6 billion yuan, according to Tianhong, and is expected to be one of the most successful mutual funds in the country this year.
Alibaba, which is expected to file for an initial public offering in New York next year that could value the company at more than US$100 billion, has been leading the drive by domestic internet companies into highly regulated financial services.
"Tianhong and Alibaba are mutually complementary," said Ding Xuemei, a spokeswoman for Tianhong.
"Alibaba is very experienced in the internet and we are very experienced in investment management. We partner up for a better prospect in internet finance."
Tianhong's management would not change, Ding said.
Alibaba bought its Tianhong stake through a fund-raising exercise that saw Tianhong's registered capital more than double to 514.3 million yuan from 180 million yuan.
"In order to give investors in Yu E Bao more security, improve innovation and provide more products and services, we have chosen to co-operate with Tianhong Asset Management," Alipay said on its official Sina Weibo microblog site.
Alipay is the mainland's biggest third-party payment platform, providing payment solutions to 460,000 merchants and with 800 million registered accounts.
Customers can invest as little as one yuan in the Yu E Bao service and can withdraw their money and return it to their Alipay accounts at any time.
