Vanguard sells stake in Ant joint venture, accelerating China exit
VANGUARD Group unloaded its 49 per cent stake in a robo-advisory joint venture with Jack Ma-backed Ant Group, accelerating its exit from China’s 29 trillion yuan (S$5.45 trillion) mutual fund market.
Vanguard sold its minority stake to Ant, which will retain full ownership of the firm beginning next year, the Malvern, Pennsylvania-based company said on Tuesday (Oct 17) to Bloomberg News. Ant did not immediately respond to an e-mailed query outside business hours. The price was not disclosed.
The US asset management giant decided earlier this year to shutter businesses in China and exit the advisory venture, one step closer to a complete retreat from the world’s second-largest economy where it once saw significant potential. By contrast, global competitors including BlackRock and Fidelity International have been boosting their onshore presence with fully-owned fund units betting on the nation’s economic growth and pension reform.
Vanguard has notified the Chinese government of intentions to close its unit in Shanghai, Bloomberg reported in March, according to sources familiar with the matter. It remains unclear when the company will close the unit, which now mainly engages in client liaising and research.
Vanguard scrapped plans for a mutual fund management license two years ago, surprising the market as competitors embraced China’s potential. Fidelity and Neuberger Berman Group have since won approvals and have started selling products, while Morgan Stanley, JPMorgan Chase & Co and Manulife Financial have acquired full ownership of local joint ventures.
The robo-advisory firm, known as Vanguard Investment Advisors (Shanghai) Investment Consultancy, has more than three million users. It managed 6.9 billion yuan as at early 2021.
“We are pleased that the joint venture has developed the sophisticated resources in-house to fulfil its mission to provide high-quality advisory services to the public,” Scott Conking, managing director of Vanguard Asia said. “Going forward, Vanguard will prioritise its global business in regions in which we offer our own investment products and services.” BLOOMBERG
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