• Ernie Diaz

Bye Bye Black Rock

A few weeks back, we commented on Vanguard’s China repositioning, from institutional services to ETFs. Now no less a behemoth than Black Rock is transitioning from private funds to mutual, even though it means liquidating their private funds to avoid conflict of interest.

As we said before, there is boundless potential in bringing well-managed financial products to China’s moneyed masses, and can’t help reiterating our partner Raffles’ research that market penetration for wealth management on the mainland is only 3%.

But woe be to Black Rock if they think it will be a smooth path to the fabled “one billion customers”.

“Black Rock is trading in the learning curve it knows for one it hopes will be narrower,” says Jimmy Jeremejev. “We know first-hand how unfamiliar it can be raising funds with China institutions, the difficulties and frustrations. However, Black Rock doesn’t mean as much to the prospective Chinese mutual fund investor as it does to the institutional one. Meanwhile, China’s mutual fund industry is over three trillion dollars, and returning a median of zero.”

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