What game is Blackrock playing?

Discussion in 'Wall St. News' started by themickey, Aug 18, 2021.

  1. themickey


    The world’s biggest money manager faces a big test in China’s $21 trillion wealth market
    By Bloomberg News August 27, 2021

    BlackRock is gearing up for the first test of Chinese investor appetite for its own mutual fund products, more than 15 years after entering the world’s most promising wealth market.

    The company’s new China unit is launching its debut product on August 30, just two months after winning regulatory approval to become the nation’s first wholly foreign-owned mutual fund firm. Its wealth management joint venture with China Construction Bank and Singapore’s Temasek also said earlier it obtained permission to start a quant equities offering “in the near term.”

    BlackRock, led by Larry Fink, is leading a global charge into China’s 100 trillion yuan asset management industry after regulators eased curbs on foreign control last year.Credit:Bloomberg

    The world’s largest money manager is leading a global foray into China’s 100 trillion yuan ($21.3 trillion) asset management industry after regulators eased curbs on foreign control last year. It faces a challenge appealing to yield-hungry Chinese retail investors in a crowded market that’s dominated by local firms, even as surging demand provides a promising entry point.

    “Fund launches are rising steadily and have stayed at high levels” in recent months, said Sun Guiping, an analyst at Shanghai Securities Co. “BlackRock’s first fund is coming right in time to catch a big wave of launches in the second half of the year.”

    New mutual funds have raised more than 2 trillion yuan this year through August 18, already the second-highest annual amount ever, only trailing last year’s record 3.1 trillion yuan. The total includes 19 products that netted more than 10 billion yuan in their initial launch.

    “BlackRock is well-positioned to introduce a series of mutual fund products and help more Chinese investors improve their financial well-being through its global investment platform, well-informed local market insights and advanced risk management expertise,” the US firm’s China head Tony Tang said in a statement on August 20.

    BlackRock has been issuing mutual fund products with Bank of China Investment Management, which it has held a stake in since 2006. The company also tested the waters a few years ago with a private securities fund business, which ceased operations after it won the mutual fund license as required under Chinese rules.

    The BlackRock China New Horizon Mixed Securities Investment Fund will be managed by Alex Tang, a 16-year veteran of investing in China’s A share markets, and Shan Xiuli. It will focus on five growth areas including new energy, retirement and digital transformation, according to the company.

    The product will be distributed by three Chinese lenders, led by China Construction Bank, along with seven brokerages including Citic Securities, as part of a marketing strategy that appears appropriate to market experts.

    “The lineup is quite strong,” said Lu Haiyang, vice president of Xin Hu Wealth Investment Management Co., a wealth firm that also distributes funds. The mixed fund also “better fits the current market environment” than other product types, Lu added.

    Internet platforms, which have been grabbing a growing share in fund distribution from traditional channels partly thanks to lower fees, are absent from the list. That might not matter because the new fund’s fee level is already among the lowest in the market as banks cut charges to win back clients, Lu said.

    Still, while global asset managers’ investment strategies have long been closely examined by local investors for signs of foreign capital flows, their onshore funds will have to build a track record to gain relevance, Shanghai Securities’ Sun said.

    “Whether BlackRock funds can come up with good investment performance still needs the test of time,” he said. “If they do outperform, market attention on them could rise.”

    #31     Aug 26, 2021
  2. themickey


    George Soros Calls BlackRock’s China Investment ‘Tragic Mistake’
    By Russell Ward 7 September 2021
    • Soros warns in WSJ op-ed of risks to clients, U.S. security
    • U.S.-China are in ‘life and death conflict,’ Soros says
    George Soros Photographer: Simon Dawson/Bloomberg

    George Soros criticized BlackRock Inc.’s China push as a risk to clients’ money and U.S. security interests, in the billionaire financier and philanthropist’s latest broadside against investment in the world’s second-largest economy.

    “Pouring billions of dollars into China now is a tragic mistake,” Soros wrote in an op-ed in the Wall Street Journal. “It is likely to lose money for BlackRock’s clients and, more important, will damage the national security interests of the U.S. and other democracies.”

    BlackRock is leading a global foray into China’s asset management industry. The world’s largest money manager last month began offering investment products to Chinese individuals, two months after winning approval to become the nation’s first wholly foreign-owned mutual fund firm.

    The commentary was one several that Soros has written in recent weeks to warn against closer economic ties to Xi Jinping’s China amid a wave of market-roiling crackdowns. Soros denounced Xi in another Journal op-ed last month as “the most dangerous enemy of open societies in the world” and subsequently argued in the Financial Times that Congress should pass legislation limiting asset managers’ investments to “companies where actual governance structures are both transparent and aligned with stakeholders.”

    In the latest piece, Soros said BlackRock appeared to misunderstand Xi, whose administration he said regarded all Chinese companies as “instruments of the one-party state.”

    The divergent views from two of the world’s most influential money managers underscore the increasingly fraught environment confronting financial firms in Asia’s largest economy. While Xi has made it easier for foreign investors to participate in domestic markets, his government is also tightening its grip on the private sector and clashing with the U.S. on everything from cybersecurity to human rights abuses in Xinjiang.

    Soros said the curbs that began with the sudden cancellation of Ant Group Co.’s initial public offering last year have since “reached a crescendo.” He cited the actions against ride-hailing company Didi Global Inc. days after its New York listing, and the crackdown on “U.S.-financed” Chinese tutoring companies. Soros also said BlackRock managers must be aware of an “enormous crisis brewing in China’s real estate market.”

    Although Soros remains an influential backer of U.S. President Joe Biden’s Democratic Party, he no longer manages outside money and is a minority voice for now on Wall Street. BlackRock, Goldman Sachs Group Inc. and most of their major peers in money management and banking have decided the opportunities in China outweigh the risks.

    “Today, the U.S. and China are engaged in a life and death conflict between two systems of governance: repressive and democratic,” Soros said.

    — With assistance by Michael Patterson, and Dingmin Zhang
    #32     Sep 7, 2021
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  3. VicBee


    Not sure I agree with this last sentence. Singapore is a repressive system, but Soros is fully invested in various projects there. Also, Soros's most outspoken detractors are in democratic America, not China. I don't think Chinese themselves would consider their country repressive and we certainly have valid concerns about how democratic America is.
    #33     Sep 7, 2021
  4. %%
    Good points.
    Not that Singapore is anywhere as near oppressiVe as the ChiComs.
    I seldom agree with Mr Soros lack of religion/redemption, or public policy.
    Bu he did help top trader Jim Rogers in their fund + looks like Mr Soros is right to be bearish\against the Chicoms.
    YINN \china bull x3 looks like Mr Soros+ the Bass bro are right to be bearish[NOT long that one \LOL......................................................................................................................
    NOT a prediction/ i buy Chinese canned mandarin oranges, my banker did also, but he never bought Chicom stocks:caution::caution:
    #34     Sep 8, 2021
  5. themickey


    Markets https://www.bloomberg.com/news/arti...ound-in-china-defying-soros?srnd=premium-asia
    BlackRock, Defying Soros Warning, Breaks New Ground in China
    By Annie Massa and Silla Brush 9 September 2021
    • Day after Soros op-ed, BlackRock closes $1 billion fundraising
    • Fidelity, Invesco among other firms with big China ambitions
    George Soros Photographer: Simon Dawson/Bloomberg

    For the world’s biggest money managers, China’s trillions in investable assets speak louder than any warnings of a “tragic mistake” from billionaire George Soros.

    About a day after Soros called out BlackRock Inc. in a Wall Street Journal op-ed, the $9.5 trillion asset manager said it drew in 6.7 billion yuan ($1 billion) for its first China mutual fund, closing fundraising days ahead of schedule so it could invest sooner. It had just launched the debut product last week, about two months after becoming the first foreign firm allowed to start a wholly owned mutual fund business in the world’s second-largest economy.

    The rush to scale up in China goes beyond BlackRock. Fidelity Investments won its license from the China Securities Regulatory Commission last month, even as President Xi Jinping redoubled efforts to crack down on businesses from real estate to tech. Invesco Ltd., an early entrant with the first China-U.S. fund management joint venture in 2003, has said it wants to increase its China assets by more than 40% to $100 billion by 2023.

    For now, these U.S.-based investing giants are showing no signs of retreating from China, where the mutual-fund business is still nascent and growing with the country’s middle class.

    “It’s more complicated than Soros makes it out to be,” Taisu Zhang, a Yale Law School professor who specializes in contemporary Chinese law and politics, said in a phone interview. He added that U.S. asset managers have shown a level of comfort with scaling up in China despite government constraints. “They’ll put up with those things if it means getting access to what will be one of the most important economies over the next several years.”

    In response to Soros, New York-based BlackRock pointed to the $600 billion in trade between the two nations, and to China’s need for greater retirement savings.

    “The United States and China have a large and complex economic relationship,” a BlackRock spokesperson said in an emailed statement. “Through our investment activity, U.S.-based asset managers and other financial institutions contribute to the economic interconnectedness of the world’s two largest economies.”

    To Soros, those intertwined fortunes are part of the problem.

    The two geopolitical superpowers are “engaged in a life and death conflict between two systems of governance: repressive and democratic,” he wrote in the op-ed. Investing billions of dollars in China now will likely “damage the national security interests of the U.S. and other democracies.”

    The spat underscores the skepticism money managers are navigating as they jockey for dominance in China, where household wealth is estimated to increase to $35 trillion by 2023. Pressure is mounting in Washington: The Securities and Exchange Commission will demand that Chinese companies trading in U.S. markets provide more information to investors about political and regulatory risks, as well as shell-company structures.

    The growing backlash and scrutiny could prove a headache for some of the most well-known financial institutions.

    JPMorgan Chase & Co. is the top foreign asset manager in China, followed by UBS Group AG, Invesco, BlackRock, Schroders Plc and Fidelity, according to an April report from Shanghai-based consultant Z-Ben Advisors. The rankings are based on a scoring system that incorporates money managed for Chinese customers onshore and globally, as well as outside investments overseen in China.

    Meanwhile, Neuberger Berman, Van Eck Associates, AllianceBernstein and Schroders are all waiting for regulatory approval to set up fully owned public-fund companies like BlackRock and Fidelity. None of the firms have said that they’re deviating from those plans.

    JPMorgan and Fidelity declined to comment. Invesco didn’t reply to requests for comment.

    China began opening its financial sector in 2020, rolling back a previous restriction that required foreign money managers to have a joint venture with an onshore firm in order to sell funds in the country. BlackRock had been issuing mutual fund products with Bank of China Investment Management.

    The standalone mutual fund, the BlackRock China New Horizon Mixed Securities Investment Fund, will be managed by Alex Tang and Shan Xiuli. It attracted more than 111,000 investors, the company said.

    “We are committed to bringing long-term investment opportunities for Chinese investors,” said Chi Zhang, BlackRock Fund Management’s general manager.

    When asked in July how tensions between the U.S. and China might affect business, BlackRock Chief Executive Officer Larry Fink said the firm has remained consistent in its commitment to expanding in the nation.

    “In all my conversations this is considered to be a good thing,” Fink said in an interview with Bloomberg, “because as China expands its markets we want China to have a more open market system.”
    #35     Sep 8, 2021
  6. themickey


    Were saying that 20 years ago, how did it work out?
    #36     Sep 8, 2021
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  7. VicBee


    I think it is working out, at Chinese pace. The fact the China transformed from a 3rd world rural society to a first world urban one shows huge evolution. China’s pace of modernisation is at levels never seen before in the history of humanity. But we know that there's more to development than things and evolution of 1.2 billion people is going to be much slower.
    The CCP has a large place in Chinese modernisation, unifying a nation fragmented for centuries in various poles of power ruled by hyper conservative fiefdoms. Nation building is not easy, China is big with half a dozen ethnic groups and cultures, invaded and pillaged by Western nations and Japan.
    Western powers spent the better part of the 19th century expanding, colonizing and enriching themselves. We made the world in our image, following centuries of western evolution that included a lot of waring, slaughtering, taking and preaching. When we weakened and realized we could no longer hold on to our possessions, we sought to maintain our influence by establishing structures of authority which we could communicate with and hold accountable in our dealings with them. We defined the territories, we created the political structures, we controlled the economies.
    China was somewhat spared due to its size and its sophistication, but blunted by its conservative ethos and permanent internecine power struggles. Its modernisation came with the CCP and continues to consolidate today. In some ways, China is where European nations were in earlier centuries, before we became what we are today. It is still defining and asserting its borders, its identity and its influence. These are more difficult than building things, especially when you're the elephant in the room.
    The CCP frames the nation in modern parameters that other modern nations can understand and communicate with. Imagine China if it was pre European, with regions setting their own rules, currencies and ambitions. While that would satisfy our colonial like domination institutions, Europe shows us that evolution is integration, not dislocation.
    #37     Sep 8, 2021
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  8. themickey


    George Soros' China haymaker leaves BlackRock bleeding
    Beijing is not as open for business as many Western bankers think
    William Pesek September 9, 2021
    George Soros, pictured in Vienna in June 2019: Soros senses menace within China's leadership, © AP
    Few things trigger investors more than trending news linking George Soros and Asia.

    It gets worse when a billionaire infamous for shorting entire economies -- Malaysia, anyone? -- starts betting at least rhetorically against the biggest in Asia. Soros is now chiding BlackRock for leading the global race to invest in China, calling it a "tragic mistake" in a recent Wall Street Journal op-ed.

    Soros, 91, is essentially out of the hedge fund game. He has stopped managing outside money and focuses mostly on philanthropy and U.S. Democratic Party politics, where he remains an influential backer of President Joe Biden. This makes Soros quite the lightning rod for former President Donald Trump and his conspiracy theory-crazed acolytes.

    Yet Soros senses menace within China's leadership, putting him and Trump on the same page in at least one respect. In a recent column, "Investors in Xi's China face a rude awakening," published in the Financial Times on Aug. 30, Soros called Xi Jinping "the most dangerous enemy of open societies in the world."

    Attacking the morality of BlackRock and peers pouring billions into China, Soros added in his WSJ piece that it "is likely to lose money for BlackRock clients and, more importantly, will damage the national security interests of the U.S. and other democracies."

    Strong words, but probably not ones the Holocaust survivor uses lightly. Budapest-born Soros survived the Nazi occupation of Hungary in the 1940s. He later became a U.S. citizen and founded Soros Fund Management and the fabled Quantum Fund.

    In the early 1990s, Soros earned the title of "The Man Who Broke the Bank of England" for shorting the pound, netting a roughly $1 billion windfall.

    A few years later Soros made then-Malaysian Prime Minister Mahathir Mohamad's life hell as he shorted the ringgit. Now Soros is targeting Asia anew, at least in spirit, warning that Xi is taking China down a dangerous path that Wall Street should not be following.

    "Today," Soros argued, "the U.S. and China are engaged in a life-and-death conflict between two systems of governance: repressive and democratic."

    Bombast aside, it is hard to dismiss Soros' argument. He has a good point when he warns that Xi's crackdown on Ant Group's initial public offering and ride-sharing giant Didi Global means Xi's party is making all mainland companies "instruments of the state." A stealth nationalization of the private sector.

    What, then, do investors think they are actually investing in? This tension between the globe's biggest money manager -- BlackRock -- and one of the world's most influential financial thinkers speaks to the minefield Xi has laid for international investors.

    Paradoxes abound. China is making it supereasy for foreign investment giants to rush into its domestic markets. But his policies and assault on press freedom are making China Inc. more opaque and less accountable to shareholders.

    [​IMG] Xi Jinping, pictured in Bejing in May 2019: his policies and assault on press freedom are making China Inc. more opaque and less accountable to shareholders. © Reuters

    Soros, for example, worried there is an "enormous crisis brewing in China's real estate market." The will-they-or-won't-they default drama at China Evergrande Group, the most indebted property developer anywhere, suggests Soros might not be crazy.

    By tightening Beijing's grip on the private sector, Xi is also empowering an inefficient state sector he pledged to shrink. His cybersecurity exploits, canceling of Hong Kong's freedoms, human rights abuses in Xinjiang and lack of cooperation on probing the origins of COVID-19 risk making overseas investors feel dirty about investing in China.

    This has not stopped BlackRock founders Larry Fink and Robert Kapito from being the big-money vanguard. In June, the firm became the first wholly foreign-owned mutual fund in China. The firm has begun offering mainland individuals investment products. And this week, it raised about $1 billion for its first mainland mutual fund.

    BlackRock is being accompanied by a who's-who of Wall Street names betting the opportunities in China outweigh the risks: HSBC, JPMorgan, Credit Suisse, Vanguard, French asset manager Amundi. Britain's Schroders.

    Ray Dalio is plenty enthusiastic, too. Dalio runs Bridgewater Associates, the largest hedge fund. Only it is not Soros telling Dalio his bullishness on China is bunk. Instead, it is China expert George Magnus who argues Dalio and his ilk are flat "wrong" to think Xi is making China a more vibrant place.

    Again, Xi's actions in recent months raise questions about whether China is really as open for business as Western bankers think. His "common prosperity" agenda is sowing extreme chaos. The resulting fallout for economic growth -- and asset prices -- is imperiling global trust in "Xiconomics."

    Xi's main obsession is winning an unprecedented third term as leader in 2022. But at what cost to China's global standing? Amid Trump's trade war, the future was China's for the taking. Its clout was surging. But Xi's tech putsch is both punching China's economy in the face and spooking international investors.

    It raises questions about the timing of Xi's team launching a Beijing stock exchange. This runs cartoonishly counter to Xi's clampdown on China's most celebrated entrepreneurs. Xi's actions these last 10 months seem anathema to Deng Xiaoping's 1980s reforms, upgrades he pledged to accelerate. These days, Xi is channeling Mao Zedong too much for comfort.

    China is free to ignore Soros' musings. The nonagenarian has let his rhetoric get away from him at times. But he has a point that crushing China's entrepreneurial spirit is no way to raise the nation's competitive game.
    #38     Sep 8, 2021
  9. %%
    LOOKS LIKE Mr Soros is right, against chicom investments;
    Mr Fink may live his name if he keeps attempting to promoting Chicoms like a snake oil vaccine/LOL. Heard a medical doctor say this week ''that vaccine is the worst killer in US history.''
    HOWever i buy mandarin oranges, so i would not curse Mr fink for that\his investors may curse him for that.....................................................................................
    #39     Sep 10, 2021
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  10. JSOP


    What game is Blackrock playing?

    -Still not fully weaned off China and trying to get some last bit of milk before getting whacked on the head by China for good and not knowing that this time China is making the west regurgitate the milk that it's fed to the west by making it easier for foreign investors to put their money into the Chinese financial market and at the same time cracking down on Chinese firms whose shares trade on the foreign market to make sure investors in the west gets screwed.

    Apparently Goldman Sachs is joining in the fray too to open up investment business in China to teach China how to broaden up investment products in China. The Chinese government is trying to get the Chinese people to broaden their investment horizon to invest in other products other than stocks and real estate properties but doesn't have the innovation capability to do so so Goldman Sachs is there to teach China how to do it. That's all fine and dandy but don't come home crying "technology theft" when China steals all your investment ideas and strategies which China is guaranteed to do.

    Right now the only thing that the West has the slightest edge over China is in the field of financial investment. China has really beaten the world in the value-added segment but it is still not that sophisticated in capital and financial investment, how to channel effectively and efficiently the funds from the ones who have them to the ones who need them. Once it learns that, then the West has really no edges left. Soros is not wrong in saying what Blackrock an Goldman Sachs is doing threatens national security. But anyway I guess some companies just want to earn money in spite of everything else, even long-term survival.
    #40     Sep 11, 2021
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