UBS has made the decision to halt its plans for establishing a new fund unit in China and will maintain ownership in a mega fund joint venture resulting from its takeover of Credit Suisse, according to two anonymous sources with direct knowledge of the matter. The bank had initially planned to expand in China’s rapidly growing $3.9 trillion fund market by setting up a wholly-owned mutual fund business, but suspended these plans indefinitely due to regulations limiting ownership to two fund management firms in the market. UBS already owns 49 percent of UBS SDIC Fund Management and a 20-percent stake in ICBC Credit Suisse Asset Management, the joint venture with Industrial and Commercial Bank of China. The decision to keep these joint ventures intact was influenced by the lucrative income they generate.
It may take over a year for UBS to finalize its decision on the fate of the newly planned fund unit, leaving around 60 employees uncertain about their future. The news of UBS’s decision was first reported by Ignites Asia.
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