Goldman Sachs Receives Approval from Chinese Authorities for Joint Asset Management Venture with Industrial and Commercial Bank of China

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Park Byung-hee] Bloomberg reported on the 25th (local time) that a joint asset management venture established by the U.S. investment bank Goldman Sachs and the Industrial and Commercial Bank of China (ICBC) has received approval from Chinese authorities.

Goldman Sachs will become the major shareholder of the joint venture and target the Chinese asset management market. Goldman Sachs will hold 51% of the joint venture's shares, while ICBC will hold 49%.

Tuan Lam, an analyst at Goldman Sachs Asset Management, said, "Thanks to the increase in Chinese household assets and ongoing financial market reforms, the Chinese asset management market is growing," adding, "The joint venture with ICBC will accelerate Goldman Sachs' goal of securing a leading position in the world's largest and fastest-growing Chinese asset management market."

According to Boston Consulting Group (BCG) and China's Everbright Bank, the size of China's asset market last year is estimated at 121.6 trillion yuan (approximately 2,129.7 trillion won). BCG and Everbright analyzed that the market size grew by 10% compared to 2019.

Goldman Sachs estimated that by 2030, the size of investable assets of Chinese households will exceed 70 trillion dollars (approximately 7,852.6 trillion won). It is expected that more than half of these funds will be invested in securities, mutual funds, and asset management products.

Following the growth prospects of China's asset management market, major global financial institutions are actively entering the Chinese market. China is also opening its market further to keep pace. Last year, China approved an asset management joint venture established by the French asset management company Amundi and the Bank of China, which for the first time allowed a foreign financial institution to hold a major shareholder position.

The world's largest asset management company, BlackRock, also received approval for asset management operations in China this month through a joint venture with China Construction Bank and Singapore's sovereign wealth fund Temasek.

JP Morgan Asset Management also announced plans to enter the Chinese asset management market through acquisitions last year. In fact, in March, it agreed to acquire a 10% stake in the asset management business of China Merchants Bank for 410 million dollars.

This content was produced with the assistance of AI translation services.