Merrill Lynch Investment Managers has just announced it has gotten a preparatory license from the Chinese Security Regulatory Commission to establish a joint venture mutual fund company with subsidiaries of the Bank of China.
The London-based unit of Merrill Lynch & Co. will be partners with BOC International China Ltd. and BOC International Holdings. The latter is headquartered in Hong Kong and is a wholly owned subsidiary of the Bank of China Group.
The Merrill unit is to have a 16.5% stake in the joint venture; BOC International Holdings, 16.5%; and BOC International China Ltd., 67%. The venture is to be named BOC International Investment Managers.
Merrill is to contribute management expertise and provide technical assistance and fund management know-how. This is to cover all aspects of running a fund management business, ranging from investment process through sales and marketing and product development to compliance, training, and information technology. The venture will be based in Shanghai.
China, with 1.3 billion people and a GDP that has nearly doubled from 1995 to 2002, is a major strategic market for Merrill Lynch, it said, whose long-term-fund management potential is demonstrated by the fact that China's personal savings nearly doubled in this period.