Morgan Stanley IM latest Wall Street name to cement presence in China with fully owned China joint venture

Upon completion Morgan Stanley IM’s stake in Morgan Stanley Huxian Funds will go from 49% to 100%; move marks a ‘strategic advancement’ in its China footprint.

Morgan Stanley Investment Management (IM) has become the latest major Wall Street firm to gain the regulatory approvals needed to wholly own its China joint venture.

The China Securities Regulatory Commission (CSRC) has approved the investment manager’s acquisition of Morgan Stanley Huaxin Funds, taking its current stake in the firm from 49% to 100%.

The firm confirmed that the equity step-up remains subject to registration and other required processes by Chinese regulators.

Morgan Stanley Huaxin Funds became a joint venture in June 2008. It offers investment management services to retail and institutional clients across fixed income, active equity, quantitative equity, and multi-asset investment.

“Wholly-owning our China mutual funds business will allow us to more fully serve this dynamic asset and wealth management market and adds a significant pillar of growth to our global investment management franchise,” said Dan Simkowitz, head of investment management at Morgan Stanley, in a statement.

“As we further invest in our onshore platform, we will bring over our four decades of industry experience and global research expertise in sustainability and diversified portfolio management to help domestic clients achieve their investment goals.”

The news follows a similar announcement from JP Morgan AM, which also gained regulatory approval to complete its acquisition of China International Fund Management (CIFM) last month.

JP Morgan AM’s approval came two years after JPMAM’s original application to buy out CIFM in 2020 and followed the lifting of Covid-19 policies in China to boost the confidence of overseas investors.

Goldman Sachs also received approval from CSRC in October 2021 to acquire the remaining equity interest in Goldman Sachs Gao Hua (GSGH) after moving to buy-out its partner following a 17-year joint venture in December 2020.

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