Fears over the deadly flu virus Sare have not hampered JP Morgan Fleming Asset Management's resolve to form a joint venture with Shanghai International Trust and Investment Corporation (Sitico) to establish a fund management business in China.
JP Morgan will initially invest approximately $6m in the venture, which will give the US asset manager a 33% stake in the Chinese business ' the legal limit for foreign holdings in a mainland fund management company. It intends to raise this stake to 49% when the law permits.
'With a population of 1.2 billion, strong economic growth and a high savings rate, China offers an exciting long-term growth opportunity for us,' said Clive Brown, head of JP Morgan's international business.
He says that JP Morgan's global track record in fund management ' which includes the Asian expertise of JF Asset Management ' combined with Sitico 's local expertise will ensure the JV becomes China's leading fund management company.
Sitico, a founding member of the Shanghai Stock Exchange, is the principal financing and investment vehicle of the Shanghai municipal government.
In 1993, Sitico sponsored the first RMB-denominated mutual fund in Shanghai ' the Golden Dragon Fund ' and Shanghai's first Hong Kong-registered and listed mutual fund, the Shanghai Growth Fund.
The type of products which the two companies plan to offer Chinese investors has not yet been determined, as this depends on market conditions.
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