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Thursday, June 13, 2019

U.S. Fundsters Advance In China and Mexico

News summary by MFWire's editors

Several big U.S. fund firms are advancing overseas this week: two in China and one in Mexico.

On Tuesday, Lars Jensen, head of Americas international at Legg Mason, confirmed that the Baltimore-based, publicly traded mutual fund firm has signed a strategic alliance agreement with Corporacion Actinver, a private bank based in Mexico City. (Actinver lays claim to being the second biggest Mexican private bank by branch count and the biggest by client count.) Actinver will manage and distribute a trio of funds powered by models from ClearBridge, Martin Currie, and Wamco (a trio of Legg affiliates). The Baltimore Business Journal reported on the alliance.

"The Mexican asset management industry is still under-developed compared to those in other countries so the opportunities are enormous," states Alonso Madero, CEO of the asset management unit at Actinver. "By working together, Actinver and Legg Mason are encouraging the development of the market and, by extension, helping with the economic development of the country."

Jensen, for his part, notes that the Legg team sees "substantial growth potential" in Mexico.

Meanwhile, on the other side of the world, a pair of U.S. giants are looking to China. A Shanghai unit of Vanguard has launched a joint a venture with Ant Financial Services, a Chinese fintech company, Reuters reports. And, separately, James Gorman, CEO of Morgan Stanley, wants to gain majority ownership of a joint venture in Canada, Reuters reports.

The wire service notes that Morgan Stanley already owns a plurality (but not a majority stake) in a Chinese joint venture mutual business, Morgan Stanley Huaxin Fund Management, and a minority stake in a securities joint venture also backed by Huaxin Securities. Yet Gorman, speaking in Montreal at the International Economic Forum of the Americas, reportedly didn't specify which joint venture he's looking to amp up the investment bank's stake in.

As for Vanguard's joint venture with Ant, Peter Alexander, managing director of Z-Ben Advisors, expects it'll translate into Ant handling distribution in China while offering Vanguard services (probably its signature low-cost, usually passive funds) to Chinese investors.

Chinese asset management rules have been changing of late, perhaps making the market more accessible to U.S. fundsters. Per reports last month, another U.S. financial services giant may soon be ramping up its ownership in a different Chinese asset management joint venture.

Yet Morgan Stanley's and Vanguard's moves come as Mark Austen, CEO of the Asia Securities Industry and Financial Markets Association (SIFMA), is urging China not to let any trade war escalation with the U.S. to hit asset managers and other financial services firms. 

Edited by: Neil Anderson, Managing Editor

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