State Street, which has a long on-the-ground history in China, including a large administration and software base in Hangzhou, has decided on a traditional partnership structure for its first Chinese domestic asset management business.
The firm announced last week that it would take a 49 per cent interest, through State Street Global Advisors, in a new business with Zhongrong International Trust Company (ZIT) of Beijing as the other stakeholder. The venture has applied for the relevant licenses, which usually take several months for assessment.
State Street, as previously announced, is also nearing the final phase of a probationary period for a full banking licence in Beijing. The Hangzhou presence, which has about 1,500 employees, dates back to the early 1990s when State Street formed a research alliance with a Hangzhou university, which has remained an ongoing relationship.
Hangzhou is a small city of about 6 million residents, known for a beautiful lake, Westlake, and the former holiday residence of Chairman Mao Zedong.
Little further details of the SSgA venture are likely to be known until licences are granted. ZIT’s website, www.zritc.com, is in Chinese only but a Google translation indicates a firm with a property bent.
Until now, SSgA has looked to provide international products to Chinese institutional investors. But it also built the first exchange traded fund for the Chinese market, on behalf of China’s largest fund manager, China Asset Management. There are about 70 licensed mainstream – listed shares – managers in China.