American investment manager VanEck has established a private fund unit in China, returning to the onshore market as Beijing vows to shore up the confidence of foreign enterprises doing business in the world’s second-largest economy.
The U.S. firm won approval on Wednesday to launch a private fund in China via a Shanghai-based unit, a filing from the Asset Management Association of China shows.
The green light marks the return of VanEck, which is managing $114 billion in assets, two years after it aborted a plan to set up a mutual fund unit in China, sources with knowledge told Reuters in 2023.
Uncertainties over U.S.-China relations and a delay in launching the business due to COVID were the key concerns of the privately held U.S. firm, one of the sources said at that time.
Last year, Fidelity International, Morgan Stanley, and Legal & General, were among those either cutting China-focused jobs or shelving expansion plans.
Compared with a private fund platform in China, a mutual fund unit requires 10 to 20 times more registered capital, more staff, and operates under stricter rules.
Beijing has struggled to assuage foreign investors’ concerns over the durability of the $18 trillion economy, and longstanding unease over China’s tightening regulations and abrupt crackdowns on foreign firms.
China’s President Xi Jinping met with global CEOs in Beijing on Friday, as the government tries to woo foreign firms whose investment could give the ailing Chinese economy a boost and help insulate it against simmering geopolitical tensions.
Reuters
