British asset manager Abrdn is reportedly in advanced negotiations with China’s Citic Bank to establish a joint venture (JV) in the country’s asset management sector.
Abrdn is expected to hold a majority stake in the venture, with the remaining shares owned by Citic Wealth Management, a subsidiary of China Citic Bank, Reuters reported, citing undisclosed sources privy to the matter.
The move comes as the UK firm seeks to expand its presence in China.
Citic Wealth Management is said to be China’s third-largest bank-affiliated wealth management unit, managing assets worth CNY2 trillion (£220bn) as of the end of 2023.
Regulatory approval for the proposed venture is expected to be sought later this year.
According to reports, the discussions mark a significant development in UK-China financial cooperation, coinciding with a recent thaw in relations between the two nations.
The renewed dialogue contrasts with moves by several Western financial institutions in recent years to scale back their operations in China due to economic uncertainties and geopolitical tensions between Beijing and Washington.
Despite being in the midst of a cost-cutting programme, Abrdn has identified China as a key market for growth.
The firm already operates a 50-50 life insurance joint venture in China, established in 2003, and launched a private fund unit in 2017. Across the Asia-Pacific region, Abrdn manages £16.5bn in assets, representing 7.8% of its global total.
A successful deal would mark the second asset management partnership between a Chinese bank-affiliated wealth unit and a British firm. In 2021, Schroders launched a majority-owned venture with Bank of Communications Wealth Management.
Discussions between Abrdn and China Citic Bank have been ongoing for the past two years, with talks accelerating following the revival of high-level economic and financial negotiations between China and the UK last month, according to Reuters.
