Qatar's sovereign fund agrees to buy 10% of ChinaAMC

Qatar Investment Authority

Qatar's sovereign wealth fund has agreed to buy a 10% stake in China Asset Management Co., one of the nation's largest mutual fund firms, according to people familiar with the matter.

The stake will be sold by private equity company Primavera Capital. The Qatar Investment Authority's proposal has been submitted to Chinese regulators for approval, the people said, requesting not to be named as the matter is private. The price of the deal remains unclear.

The planned investment came as China strengthens ties with Arab nations amid geopolitical tensions with the US. The deal, if approved, will make QIA the third-largest shareholder of ChinaAMC after state-controlled Citic Securities Co. and Mackenzie Financial Corp. The mutual fund industry expanded to more than 30 trillion yuan ($4.1 trillion) in April even after a stock-market rout earlier in the year.

ChinaAMC declined to comment. The China Securities Regulatory Commission didn't immediately respond to requests for comment. QIA and Primavera declined to comment.

Reuters reported on the deal earlier. The CSRC last week said it had made a decision on whether to accept an application from ChinaAMC involving the transfer of a stake bigger than 5 per cent, without naming the buyer or seller, according to the report.

Citic Securities said in March its board agreed for Primavera to transfer its 10 per cent for at least $490 million, and the company decided to give up its right to buy the stake.

ChinaAMC managed about 1.9 trillion yuan as of Dec. 31, ranking the second-largest mutual fund firm excluding money-market funds, according to its website.