Julius Baer Agrees to Acquire 5% Stake in Chinese Wealth Manager

  • Swiss private bank and Sina take part in private placement
  • Julius Baer to pay about $17.6 million for 9.6 million shares

Julius Baer Group Ltd. is buying a 5 percent stake in Jupai Holdings Ltd., the Shanghai-based provider of financial services, as it seeks to improve access to China’s domestic wealth-management market.

The third-biggest Swiss wealth manager agreed to acquire 9,591,000 ordinary shares in Jupai at $1.83 each as part of a private placement, according to a joint statement by the companies on Wednesday. Chinese Internet company SINA Corp. also took part in the placement, increasing its stake in Jupai to 11.4 percent.

“Participating in Jupai’s private placement will provide Julius Baer with valuable insight into one of the most successful players in Chinese onshore wealth management and further strengthen our expertise in China,” Julius Baer Chief Executive Officer Boris Collardi said in the statement.

Swiss banks are exploring wealth management in mainland China, an untapped market for international financial firms. The amount controlled by millionaires in the country is expected to climb by an average of about 12 percent a year to $8.25 trillion by 2020, according to Julius Baer’s research.

UBS Group AG said in July it will open a branch in Shanghai, while Credit Suisse Group AG told investors in a strategy update in October it will look at increasing its onshore presence in China.

Julius Baer, which calls Asia its “second home market,” oversees almost a quarter of client assets under management from its offshore hubs of Hong Kong and Singapore. So far its only foray inside the country has been a representative office in Shanghai, although it has a client referral agreement with Bank of China.

Julius Baer oversaw 297 billion Swiss francs ($300 billion) for wealthy individuals and families at the end of October.

The company said separately on Wednesday it expects to report a profit for 2015, even after setting aside about $547 million to resolve a four-year U.S. investigation over Americans’ undeclared offshore accounts.

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