HSBC enters mutual fund market

Nick Land, The China Post

HSBC Asset Management (Europe) Ltd. announced yesterday that it has purchased 97 percent of China Securities Investment Trust (CSITC), Taiwan’s leading asset management company, for US$187 million.

The company is to be renamed HSBC Asset Management (Taiwan) Limited. The CSITC stock acquired by HSBC was previously held by China Development Industrial Bank Inc. (CDIB) and minority shareholders, with CDIB owning 52.87 of the company. The remaining 3 percent of the CSITC stock is largely accounted for by management stock-holdings and are to be acquired over the next 1-3 years in accordance with a deferred purchase arrangement. The takeover was originally agreed between HSBC and CDIB on May 16, and has been awaiting regulatory approval.

The acquisition immediately gives HSBC a major presence in the Taiwan market, inheriting a client-list of 88,000, with approximately US$2.6 billion of assets under management, equivalent to about 2 percent of the HSBC Asset Management international total. HSBC Asset Management is responsible for roughly half of overall HSBC asset management activity. Describing the outcome of the deal, HSBC Asset Management CEO Alain Dromer said: “We are absolutely delighted that we have been able to acquire China Securities Investment Trust Corp., Taiwan’s premier asset management company. The acquisition reflects our commitment to grow our asset management and wealth management businesses in markets where we see good long-term prospects.” HSBC Holdings plc, the parent company of HSBC Asset Management, is among the largest financial conglomerates in the world, with over US$691 billion of worldwide assets and 6,500 offices in 78 countries and territories.