Manulife gets China’s first-ever ‘wholly foreign-owned enterprise’ licence

Manulife, the Canadian insurance and financial services giant with a significant presence in Asia, said today it has been granted an investment company wholly foreign-owned enterprise (WFOE) licence in China.

It said the newly-created Manulife company, to be known as the Manulife Investment (Shanghai) Ltd Co, is the first financial institution to receive the new investment company WFOE licence, and that the approval “paves the way for Manulife to provide its global public market and private assets solutions in the fast-growing asset management industry in China”.

Roy Gori, president and chief executive of Manulife Financial Asia, said the new licence would “complement our joint ventures in serving investors in China, including Manulife-Sinochem Life Insurance and Manulife TEDA Fund Management”.

Manulife-Sinochem was the first foreign invested joint-venture life insurer to sell
mutual funds in China, while Manulife TEDA provides traditional retail and institutional asset management service and solutions for clients across the Chinese market, according to Manulife.

Manulife said the new operation would join Manulife Asset Management’s existing Asia operations, which are currently run by a team of more than 180, in ten of the region’s key markets.

‘Stringent requirements’

According to a statement accompanying its announcement of the new licence, the Chinese regulators set stringent requirements for entities that seek to obtain an investment company WFOE license, “compared to other WFOE categories”.

For example, it noted, the financial institution in question must own a majority stake in an existing entity in China – Manulife met this requirement through its 51% investment in Manulife-Sinochem Life Insurance Co. Ltd, based in Shanghai.

The advantage to having the WFOE licence, Manulife noted, is that it will enable the company”to serve a broader investor base, such as small- and medium-sized institutions, private banks and independent wealth management platforms”, than it would be able to otherwise.

Potential offerings, it added, could range from traditional equities and fixed income products “to private assets strategies, such as timberland, farmland, commercial real estate” and so on.

Manulife Asset Management is the global asset management arm of Toronto-based Manulife Financial, which is listed on the Toronto, New York, Hong Kong and Philippine stock exchanges, and which, at the end of last year, had C$977bn (US$728bn) in assets under management. In the US it goes by the name of John Hancock. Toronto-based Manulife Financial Corp.

Manulife was one of the first North American insurance companies to expand into Asia, having set up a Hong Kong operation in 1898, which pre-dated its entry into the US market.

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