Royal Bank of Scotland has sold its exchange traded fund range to China Post Global, the international asset management arm of China Post & Capital Fund Management, a state-owned postal company.
Terms of the sale, which gives China Post a stake in the European market for the first time, weren’t disclosed.
The deal sees China Post acquire RBS’s €360m Market Access ETF range. It followed discussions with a number of interested parties, including asset managers, ETF providers and private equity managers, RBS said in a statement.
Ongoing withdrawal strategy
The ETF fund range sale is a continuation of the UK-government backed RBS’s ongoing strategy of withdrawing from investment banking areas. It follows on from sales last summer that included RBS’s Luxembourg UCITS and alternative investment management company business, with €28.5bn under management, to BlackFin for an undisclosed amount.
China Post Global was set up in Hong Kong last year, and houses China’s first listed fund management firm, following its listing on the National Equities Exchange & Quotations (NEEQ) last year.
It also enables China Post Global to become both “the promoter and global distributor for the market access ETFs (www.marketaccessetf.com)”, formerly RBS’s ETFs listed in Frankfurt and Zurich. These invest in commodities, emerging market and frontier market equities and have assets under management in excess of EUR360m and have track records from five to 10 years.
First European smart beta ETFs to invest in Chinese securities
China Post Global plans to cross-list Market Access’s 10 ETFs in Hong Kong, and the company said that the funds will be “seeded with additional capital to make them more attractive to institutional investors”, and also plans to develop new Chinese equity and fixed income ETFs to sell into both the European and Asian markets.
Later this year, China Post Global also plans to launch the first-ever smart beta ETFs in Europe investing in Chinese securities. China Post Global will also target extensive distribution in mainland China.
Danny Dolan, managing director of China Post Global (UK), said: “This acquisition demonstrates China Post Global’s long term commitment to the European region. Our aim is to differentiate ourselves through innovation. For example, while ETFs giving exposure to China and smart beta strategies already exist, no-one in Europe has yet combined the two.
“Other differentiators for us include our access quotas to mainland Chinese securities, the strength of our parent companies and their distribution networks, and the strong financial engineering background of our team, which will help with product construction.”
China Post Fund is the domestic Chinese asset management business co-owned by China Post Group, one of China’s largest state-owned enterprises, Capital Securities (the brokerage arm of Capital Group, another large Chinese state-owned enterprise) and Sumitomo Mitsui Banking Corp.