Neuberger Berman got the green light from Beijing to start its own mutual-fund business in China, paving the way for the American asset manager to manage money for individual Chinese investors.
The New York money manager joins other foreign companies seeking to grow in China. BlackRock Inc. BLK -1.92% raised some $1 billion for the first-ever mutual fund solely run by a foreign firm for Chinese individuals. Fidelity International received approval last month.
They and other Wall Street firms are pushing forward with business plans in China even as Washington and Beijing are mired in disputes over trade, technology, human rights in Xinjiang and national security. At a charged moment for American-China relations, U.S.-listed Chinese companies face the threat of delisting as Washington enforces tighter audit standards. Chinese President Xi Jinping’s sweeping agenda and escalating crackdown on local companies is testing the loyalties of longtime Western investors to China.
China has long kept tight control of its financial industry. For years, it prevented foreign managers from setting up their own mutual-fund business or controlling one. In early 2020, Beijing scrapped the restrictions on U.S. asset managers as part of a trade deal with Washington. Several foreign firms quickly moved to seek Chinese approval to sell mutual funds to individual investors.
Beijing’s mutual-fund company approval is a key step in letting foreign firms run money for Chinese individuals, but they still have a few more steps in the regulatory process.
Foreign firms also face extra complexities in the China market, having to compete with dominant local firms and needing to work with Chinese brokerages and banks in order to sell funds.
“We thank the local regulators for their professional and rigorous review and pledge to build a world-class effort along with our distribution partners,” said Patrick Liu, head of China at Neuberger Berman.
“Drawing on our global experience, and presence in China since 2008, we look forward to serving mutual-fund investors in the country as we do in 25 countries around the world.”
The company has managed money for Chinese institutions and wealthy investors since 2018. Neuberger Berman Chief Executive George Walker has long felt the firm needs a bigger local presence in China. Before the pandemic, he made it a point to travel frequently to China so he and other Neuberger Berman executives could meet with Chinese officials, said people familiar with the matter.
—Jing Yang contributed to this article.
Write to Dawn Lim at email@example.com
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Appeared in the September 25, 2021, print edition as ‘Neuberger Berman Expands East.’