Australia's Commonwealth Bank Takes Stake in New JV
for Retail Fund Management
Commonwealth Bank's First State Investments hopes to
raise at least US$1 billion from China's retail investors
next year through a new joint venture, FSI Hantung Fund
Management Company. First State Investments is the fund
management arm of the Commonwealth Bank.
Last year, First State agreed to partner with Shenzhen-based
Hantung Securities to set up the new joint-venture company.
Hantung Securities is a second-tier stockbroking firm,
and is the third or fourth largest bond trader in China.
Hantung has a reputation for aggressiveness and being
a first-mover.
First State has a 30 percent stake, which is the maximum
allowed under China's current investment rules. Hantung
has 40 percent, China Southern Airlines 16 percent and
Nanjing YPC Refining and Chemical Company 14 percent.
First State plans to increase its stake to 49 percent
at the end of 2004 when rules are further relaxed.
While the company is seeking to raise funds from Chinese
retail investors, the real big fish is pension funds for
large insitutions. One major target is the state-owned
national society security fund, which has funds of US$25
billion.
The new joint venture firm, which will be based in Shanghai,
is currently recruiting executives with fund management
experience through Korn Ferry to fill the top positions.
The partners agreed that it would be best to find executives
who are loyal to the new JV by recruiting from outside
their own firms.
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