Warburg Pincus set to buy minority stake in Chinese fund house
Warburg Pincus has received regulatory approval to acquire a 23.3% stake in Zhong Ou Asset Management (Zhong Ou AMC), a Chinese mutual fund manager, from Italy's Intesa Sanpaolo Bank.
The deal, which has been signed off by the China Securities Regulatory Commission (CSRC), will see the private equity firm become the largest institutional shareholder in Zhong Ou AMC.
The business was launched in 2006 as a joint venture between Unione di Banche Italiane, or UBI Banca, and local partners. UBI Banca held 49% while Guodo Securities and Pingdingshan Coal Mining owned 47% and 4%, respectively.
In 2014, Zhong Ou AMC became the first public fund company in mainland China to implement an employee share incentive plan. The management team gradually became the largest shareholder. When Intesa Sanpaolo acquired UBI Banca in 2020, the latter's stake in the joint venture had fallen to 23.3%.
Zhong Ou AMC now has more than CNY 350bn (USD 51bn) in funds under management across equities and fixed-income strategies.
“Zhong Ou AMC has built up a strong business over the years through its outstanding investment and research capabilities, market-based operation, and strong distribution channels. We are pleased to have the opportunity to become the largest institutional shareholder of the company," said Ben Zhou, a managing director at Warburg Pincus, in a statement.
Warburg Pincus became the first global private equity firm to gain exposure to China's mutual fund industry through Hwabao WP Fund Management. It acquired a 49% stake in the business - then known as Fortune SG Asset Management - from Société Générale (SocGen) in 2017.
Fortune SG was one of the first Sino-foreign fund joint ventures, established by SocGen in conjunction with Baosteel Group-owned Hwabao Trust in 2003. Hwabao WP Fund Management claims to have evolved into a leading mutual fund provider with a particular focus on passive asset management.
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