Allianz Global Investors, Blackstone get China regulatory approvals amid Beijing pledge to attract more foreign firms

Chinese regulators on Thursday granted approval to Allianz Global Investors (Allianz GI) to set up an onshore fund-management company and gave Blackstone’s newly established China unit approval to raise funds that will be invested overseas.

The approvals came as Beijing vowed to step up efforts to attract foreign companies amid sluggish economic growth, and following stock market regulator China Securities Regulatory Commission’s (CSRC) pledge last week to “boost the vitality, efficiency and appeal of the market …”.

Allianz GI, an investment-management subsidiary of German insurer Allianz, committed 300 million yuan (US$41.20 million) to establish the unit in China’s US$3.8 trillion mutual-fund market, according to an official record from the regulator.

Blackstone, joining other global asset managers seeking to tap Chinese investor demand for foreign assets, registered a fund-management unit with the Asset Management Association of China under the qualified domestic limited partnership (QDLP) programme, a notice from the regulator showed.

The Blackstone Group’s logo is seen in its headquarters in New York City on January 18, 2023. Photo: Reuters

The initial greenlight for Allianz GI came five months after it filed its application with the China Securities Regulatory Commission in March, one of the fastest regulatory nods granted to a foreign asset manager.

China’s State Council issued guidelines on Sunday that it said would further optimise the foreign investment environment and attract more of it.

The German asset manager is the latest of a host of foreign asset managers, including BlackRock and Fidelity International, seeking to expand their presence in China since it removed ownership restrictions in 2019.

The Blackstone unit, which was established in March, has seven full-time employees, including five fund professionals, the notice said.

The quota-based QDLP programme, first launched in 2012, allows foreign and domestic fund managers to raise money from Chinese high-net-worth individuals and institutions, which is then fed into offshore funds.

CSRC vows to boost ‘vitality, efficiency and appeal’ of stock market

It was not immediately clear how big Blackstone’s quota is. The US asset manager declined to comment.

The QDLP programme is generally more popular when the yuan is weaker. Chinese investors have in recent months rushed to make dollar deposits and buy Hong Kong insurance, signalling stronger demand for foreign assets as the yuan comes under more pressure.

As China forges ahead with opening its financial markets to foreigners, an increasing number of global asset managers have set up shop in the past few years, with fund giants KKR and BlackRock receiving QDLP licences last year.

US-based Thornburg Investment Management’s unit Thornburg Investment Management (Shanghai) was last month deregistered as a QDLP fund manager, after failing to launch its first private fund within the required time period of 12 months.

South China Morning Post