Reuters: SocGen Considering Selling Stake in Chinese JV to Warburg Pincus

Sep 7 2016 | 10:30pm ET

Paris-based global financial services giant Societe Generale is exploring a potential sale of its 49% stake in Fortune SG Fund Management, a joint venture with China's Baosteel Group that offers mutual funds, to global private equity firm Warburg Pincus.

Reuters first reported the news on Wednesday, citing unidentified individuals familiar with the matter. SocGen inked the JV in 2003 with state-owned Baosteel amid a rush of Western investment managers into the Chinese mutual fund space, but deep competition, and regulatory uncertainty has taken the bloom off of what was initially considered among the last untapped mutual fund markets in the world. Other large firms, such as Bank of New York Mellon, Aviva PLC, and Value Partners have also sold or exited investments in Chinese mutual fund companies.

The joint venture had some $23 billion in assets under management at the end of June, according to the Reuters article. Warburg, meanwhile, is in the midst of marketing a new $2 billion Chinese buyout fund and is reportedly betting on China's $1.2 trillion mutual fund industry eventually generating significant returns for money managers. Warburg, an early entrant into China, has a range of existing investments in China’s health care, consumer, energy, financial and real estate sectors.

Founded in 1966, New York-based Warburg Pincus is private equity firm with more than $40 billion in assets under management in an active portfolio of more than 120 investments. Since inception, Warburg Pincus has raised 15 private equity funds, which have invested more than $50 billion in over 750 companies in more than 40 countries. Former U.S. Treasury Secretary Tim Geithner serves as the company’s president.


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