Chinese regulators have given the go-ahead to Alibaba Group Holding’s online paymentaffiliate Alipay to take control of fast-growing fund firm Tianhong Asset Management Co as thee-commerce giant bulks up its push into online finance.
The China Securities Regulatory Commission (CSRC) approved Zhejiang Alibaba E-Commerce Co, the parent company of online payment company Alipay, to purchase 51percent of Tianhong, according to a filing from Tianhong shareholder Inner MongoliaJunzheng Energy & Chemical Industry Co on Thursday.
|Alibaba files for $1 billion IPO inUS|
|Alibaba helps make China’slargest fund|
Alibaba is gearing up for what could be the world’s biggesttech IPO, and online finance has become anotherbattleground for the firm. Though the business unit will belargely kept separate from the offering, it could play animportant role in the entire company’s future growth.
Tianhong has gone from near obscurity to running China’sbiggest money market fund by assets under management(AUM) in just months after it launched fund platform Yu’eBao, or “leftover treasure”, with Alipay in June last year.
Yu’e Bao’s one-year interest rates are higher than a bank’sregulator-restricted rates for one-year deposits, and are anincentive to deposit money with the platform.
Yu’e Bao, which people can run from their smartphones, isalso linked to China’s biggest online payment platformAlipay, similar to PayPal. Users can dip directly into Yu’eBao to buy products on Alibaba’s huge online shoppingwebsites and anywhere else that takes Alipay.
Alipay’s investment, valued previously at 1.18 billion yuan ($189.11 million), will see the firminject 262 million yuan in registered capital into the fund, according to the filing.
Tianhong had 554 billion yuan in AUM in the first quarter of 2014, from just 10.5 billion yuan ayear earlier, according to Z-Ben Advisors, a Shanghai-based investment managementconsultancy.