Manulife Is Said in Talks to Buy Full Control of Chinese JV

(Bloomberg) -- Manulife Financial Corp. is planning to seek full control of its mutual fund joint venture in China to expand in one of the world's fastest-growing wealth markets, according to a person familiar with the matter.

The Toronto-based insurer is in talks to buy the 51% stake being sold by partner Teda Investment Holding Co., the person said, requesting not to be identified because the matter is private. The stake would cost at least $272 million, according to an auction statement on Wednesday.

The Canadian firm, which owns 49% of the joint venture, declined to comment in an emailed statement. Teda didn't immediately respond to a request for comment after business hours. It's unclear whether any other prospective buyers have expressed interest in Teda's stake.

Manulife shares rose 0.1% to C$24.43 as of 9:36 a.m. in Toronto.

Manulife would join BlackRock Inc. and JPMorgan Chase & Co. in their pursuit of wholly-owned mutual fund companies in a market where retail public funds alone could reach $3.4 trillion by 2023, according to Deloitte LLP. Manulife is seeking to increase its Asian insurance and wealth businesses to 50% of earnings by 2025, up from 41% last year.

The joint venture, known as Manulife Teda Fund Management, had 910 million yuan ($140 million) in total assets as of December. It generated 40 million yuan in profit for the year, according to a filing.

A raft of foreign asset managers are racing to expand in China's retail wealth business. Goldman Sachs Group Inc. received approval to set up a wealth management joint venture with an arm of Industrial & Commercial Bank of China Ltd. in May.

Firms are taking multiple approaches, building wholly-owned mutual fund businesses and setting up wealth joint ventures to break into the market. BlackRock became the first foreign asset manager allowed to start a wholly-owned mutual fund business in June, just a month after it was given the nod to pursue a joint venture with China Construction Bank Corp. and Singapore's Temasek.

JPMorgan is also placing its eggs in more than one basket. The bank said it would invest $410 million for a 10% stake in China Merchants Bank Co.'s wealth management unit. That's in addition to its plan to buy out its Chinese counterpart in a joint venture known as China International Fund Management. Both deals are pending regulatory approval.

With assistance from Bloomberg