Morgan Stanley to become the largest shareholder of Chinese investment funds with an increase in its stake

SHANGHAI / HONG KONG (Reuters) – Morgan Stanley has won an auction to acquire an additional 5.5% stake in its China mutual fund joint venture, as part of a deal that will make it the largest shareholder of Morgan Stanley Huaxin Fund Management Co.

The Wall Street bank, which currently holds 37.4% stake in Morgan Stanley Huaxin, won the March 30 offer to buy the additional stake for 25.04 million yuan (2.9 million yuan). million pounds), according to the auction notice on Taobao.com.

Morgan Stanley buys a private shareholder's stake in a court-appointed auction, which will see its stake overtake that of Huaxin Securities, which holds 39.56% of the joint venture. The purchase must be approved by the Chinese securities regulators.

Morgan Stanley declined to comment.

Morgan Stanley is taking steps to boost stake in the fund, as China opens up its trillion dollar financial sector – from insurance to badet management and brokerage – for participation increased foreign

In recent months, China has allowed many foreign financial institutions to establish new businesses abroad or to strengthen their presence through majority ownership in domestic joint ventures.

According to the new rules announced at the end of 2017, Beijing has also paved the way for foreigners who wish to hold up to 51% of their mutual funds.

In addition to managing funds, Morgan Stanley also has a joint venture in securities with Huaxin, in which the Wall Street bank raised its stake to 49% in 2017. The bank had already expressed interest in increasing this stake.

(Report by Samuel Shen and Sumeet Chatterjee, edited by Muralikumar Anantharaman)