BlackRock’s China unit raises $1 billion in maiden mutual fund

September 8, 2021

SHANGHAI (Reuters) -BlackRock’s China mutual fund subsidiary set up its first fund in the country after raising 6.68 billion yuan ($1.03 billion) during a shortened subscription period, signalling warm reception by investors.

Wednesday’s disclosure came a day after billionaire investor George Soros said it was a mistake for BlackRock to invest in China now, and likely to lose money for the U.S. fund giant’s clients.

BlackRock, the first foreign asset manager to operate a wholly-owned business in China’s $3.6 trillion mutual fund industry, said its newly-launched China equity fund had raised 6.68 billion yuan from more than 111,000 investors.

The BlackRock China New Horizon Mixed Securities Investment Fund, launched on Aug. 30, stopped taking new subscriptions on Sept. 3, a week earlier than planned.

“We are very proud of achieving this milestone for our China fund management business, and are grateful for investors’ overwhelming support,” Rachel Lord, BlackRock’s chair and head of Asia-Pacific, said in a statement.

The fundraising by the world’s biggest asset manager is being closely watched as more global players prepare to enter China’s fast-growing, but highly competitive mutual fund market.

Fidelity International is setting up its mutual fund subsidiary in China, while Neuberger Berman, Schroders PLC and VanEck have also applied to set up China units to sell retail funds. Beijing scrapped a foreign ownership cap in the sector on April 1, 2020.

Writing in the Wall Street Journal on Tuesday, Soros had called BlackRock’s investment in China a tragic mistake that would damage the national security interests of the United States and other democracies.

On Wednesday, Chi Zhang, general manager of Shanghai-based BlackRock Fund Management Co, said the asset manager was committed to bringing long-term investment opportunities for Chinese investors, leveraging its track record in investing in China A-shares and its expertise.

BlackRock, which entered China more than 15 years ago, also owns a minority-owned Chinese mutual fund venture and recently set up a majority-owned Chinese wealth management venture.

($1=6.4662 Chinese yuan)

(Reporting by Samuel Shen and Andrew Galbraith; Editing by Ana Nicolaci da Costa and Clarence Fernandez)

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