BlackRock Inc, the world’s largest fund management firm, yesterday said it has completed the acquisition of Primasia Investment Trust in Taiwan, a transaction that gave it the license to raise and run on-shore funds.
The new firm has been renamed BlackRock Investment Taiwan Ltd and will exist alongside BlackRock Taiwan Ltd, an offshore fund manager, before approval from the Financial Supervisory Commission for their merger goes through, likely at the end of this year, BlackRock managing -director Chang Lin-yun (張凌雲) told a media briefing.
The company refused to disclose the size of the acquisition, saying such information is not required by law.
“We completed the purchase last week, in keeping with our plan to tap further into Asia’s fast-growing mutual fund market,” Chang said. “An international study shows the market may expand 70 percent in four years with Taiwan expected to see a 60 percent increase.”
Primasia’s modest size and absence of structured notes in its portfolio made the acquisition desirable and easier, Chang said. BlackRock Investment will retain Primasia’s three current funds, he added.
As of June 30, BlackRock manages US$3.15 trillion in funds and hires 8,500 financial professionals worldwide, 1,500 of them in Asia, company data showed. Primasia has roughly US$58 million of assets under management as of July.
The acquisition reflected Taiwan’s increasing importance in the region and the company will adopt “a localization strategy” — recruiting and grooming more local fund managers to run funds based here, rather than channel local funds to buy products abroad, Chang said.
“That approach is a big challenge, as it entails more complicated risk control,” he said, adding that the company is also eyeing the massive Chinese market.
BlackRock Investment will retain most of Primasia’s employees and will hire more in line with its expansion plan, Chang said.
On-shore mutual funds totaled NT$1.82 trillion (US$58.87 billion) as of August, while offshore funds owned by Taiwan investors amounted to NT$2.3 trillion, according to the Securities Investment Trust and Consulting Association (證券投信公會).
Chang said he expects more funds to flow to Asian markets as the US Federal Reserve is likely to print more US dollars to avoid deflation and uncertainty lingers over European recovery.
BlackRock Investment will launch a new stock fund denominated in NT dollars next first quarter and will vie for opportunities to operate government funds, he said.
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