SocGen set to join exodus from Chinese mutual fund industry


Societe Generale is set to sell its 49 per cent stake in its Chinese mutual fund business following in the footsteps of other major institutions, such as Aviva and Bank of New York Mellon Corp.

The French bank is in talks with private equity giant Warburg Pincus, according to sources familiar with the matter, Reuters has reported.

Societe Generale became one of the first foreign companies to enter the Chinese mutual fund business when it was opened up to foreign investors, joining with state-owned steelmaker Baosteel Group in 2003 to create joint venture Fortune SG Fund Management.

The asset manager has $23.6bn assets under management, according to figures from the Asset Management Association of China, making its the 16th largest mutual fund firm in the country.

Reuters reports the move is due to “cut-throat” competition from Chinese firms and says the deal could fetch between 2 to 3 per cent of AUM, suggesting it could reach up to $700m.

China’s mutual fund industry is worth $1.2trn.

Warburg Pincus, which owns a stake in Santander Asset Management, is currently raised approximately $2bn for a new China buyout fund.