Foreign institutions are still making moves in Chinese public funds.

Recently, the China Securities Regulatory Commission disclosed the "Feedback on the Change of Major Shareholder of China Europe Fund Management Co., Ltd.", providing five points of feedback on the application documents for the change of major shareholder by China Europe Fund, requiring the company to provide a written response and electronic documents within 30 working days. In the feedback, regulatory attention focused on Warburg Pinus Asia Pacific Asset Management Co., Ltd.'s positioning, payment ability, credit rating differences, basis for real estate asset management rankings, and the audited financial report for 2025.

This is not Warpinx Asia-Pacific Asset Management's first investment in China Europe Fund. In April 2023, the CSRC approved Warburg Ping Asia Pacific Asset Management to become a shareholder holding more than 5% of China Europe Fund and had no objection to its lawful acquisition of 51.26 million yuan from China Europe Fund, accounting for 23.3% of the registered capital. At that time, Warburg Ping Asia Pacific Asset Management took over the equity held by Italy's United São Paulo Bank, and after joining, became an important institutional shareholder of China Europe Fund.

After three years, Warburg Ping Asia Pacific Asset Management has once again signaled increased holdings. Foreign investors continue to increase their holdings in mature public fund platforms, mainly targeting the long-term potential of Chinese residents' wealth management, pension finance, and multi-asset allocation. With the continued deepening of China's financial sector's opening-up policies and the significant increase in global capital's attention to the Chinese market, it has become an unavoidable trend for foreign institutions to accelerate their layout in China's public fund market.

However, this transaction is still in the regulatory feedback stage, and the feedback did not disclose the proposed acquisition ratio or the equity structure after completion.

| Foreign giants want to "increase holdings" in China Europe Fund, regulators present "five questions" to strictly control access

Warburg Pinus Asia Pacific Asset Management wanted to further increase its holdings in China Europe Fund. During the review, regulators precisely focused on the role and qualifications of this foreign institution, and raised five core questions:

First question: Has the business positioning changed?

The CSRC noted that the materials described Warburg Ping Asia Pacific Asset Management as the "core institution for asset management and investment in the Asia-Pacific region," but also mentioned that it "has no other equity investments except for China Europe Fund." This sounds somewhat contradictory and is quite different from what it said when it first invested three years ago. Therefore, regulators require it to detail whether its business positioning and licensing status have changed since its initial investment.

Second question: Is there enough money in your pocket?

Buying shares requires real cash. The SFC directly required Warburg Pincus Asia Pacific Asset Management's shareholders to provide proof of assets, ensuring sufficient funds to fulfill the payment obligations for this transaction.

Question 3: Why are there discrepancies in credit ratings?

Warburg Pincus claims its credit rating has remained unchanged since 2021, but the ratings given by institutions that issued credit certificates differ during their two investments. Regulatory requirements provide a reasonable explanation for this.

Question 4: Where is the industry ranking data?

Regulators require providing Warburg Pungcus Group's original ranking among real estate asset management institutions for the past three years.

Fifth question: Submit the latest financial report.

Regulators are required to provide Warburg Pincus Asia Pacific Asset Management's audited financial report for 2025. This is consistent with the requirements made during the initial investment in 2023, when regulators also required supplementary submissions of 2022 financial reports, detailing business, assets, liabilities, and next steps.

| Why do foreign giants favor China Europe Fund?

The reason Warburg Pinus Asia Pacific Asset Management is willing to continue "increasing holdings" in China Europe Fund is not just blindly following trends, but because of its strong industry strength. Simply put, there are three main reasons:

1. Say goodbye to "going it alone" and make money through "industrialization."

In the past, many fund companies made money solely through the personal abilities of a few "star fund managers." But China Europe Fund is upgrading its model, turning it into an 'platform-based, process-driven' industrial strategy. Now, they place greater emphasis on team collaboration, building a "professional, industrialized, and digitally intelligent" investment research system to make their profitability more stable and lasting.

2. Large scale and stable performance, firmly in the industry's top tier

China Europe Fund has a very solid "foundation." By the end of Q1 2026, its non-money public fund management scale reached 452.2 billion yuan, firmly ranking 17th in the industry.

Not only is it large-scale, but its long-term performance is also very strong:

Equity (stocks, etc.): Ranked second in absolute returns among large fund companies over the past decade. Fixed income (bonds, etc.): Ranked third in absolute returns among mid-sized fund companies over the past seven years. Such a long-term performance of "excellent stock and bond quality" is very rare in the industry.

3. Clear product line layout with great future development potential

China Europe Fund's future strategy is also clear, focusing on the "1+1+N" product line: the first "1" focuses on equity investments (such as stocks), the second "1" strengthens fixed income (bonds, etc.), and the "N" focuses on expanding diversified businesses such as multi-asset and quantitative trading. This clear strategic planning has shown foreign capital its future growth potential.

| Foreign investment in Chinese public funds has sparked a "fever," with Middle Eastern capital and European giants entering the fray

Warburg Pinus Asia Pacific Asset Management's decision to continue "increasing holdings" in China Europe Fund is actually just a microcosm of the current concentration of foreign capital in China's public fund market. In recent years, more and more foreign institutions have invested in mature domestic public fund platforms through equity transfers, forming joint ventures with Chinese institutions.

Middle Eastern sovereign capital "partners with" leading public funds
. By 2025, leading public fund China Asset Management Fund will welcome heavyweight new shareholders. The CSRC approved Qatar Holdings Limited to become the major shareholder of China Asset Management, holding over 5%, acquiring 10% of the shares and ranking third in the company. This marks the official entry of Middle Eastern sovereign wealth capital into the equity structure of China's leading public fund companies.

European financial giants enter the market, and BOC Fund transforms into a "Sino-foreign joint venture"
By 2026, Spain's Santander Investment Holding Co., Ltd. has successfully acquired a stake in BOS, acquiring a 20% stake. After the transaction was completed, Shanghai Bank still held 80% of the shares, maintaining its controlling position. As a result, BOC Fund has officially transformed from a purely bank-affiliated public fund into a Sino-foreign joint venture fund company.

New joint venture public funds are constantly emerging.
Besides investing in established public funds, directly establishing a joint venture company is also an important option for foreign capital. In April 2024, Suxin Fund officially obtained the "license" to conduct public fundraising business. The company's shareholder lineup is equally impressive, including Suzhou Bank (56% stake), Singapore's CapitaLand Fund (24%), and Suzhou Industrial Park Economic Development Co., Ltd. (20% stake), a bank joint venture public fund with foreign capital background.

Kingtek's Perspective | The long-term allocation logic behind foreign investors' "counter-trend increases."

Against the backdrop of current domestic capital market volatility and some small and medium-sized public funds facing survival pressures, global private equity giant Warburg Pincus still chooses to invest real money to increase holdings in China Europe Fund, sending a strong long-term bullish signal.

The continued influx of foreign capital shows that it does not value short-term market fluctuations but highly recognizes the huge incremental potential in Chinese residents' wealth management, pension finance, and multi-asset allocation. China's public fund industry is shifting from "scale-driven" to "high-quality development." Leading platforms with mature research systems and market-oriented incentive mechanisms are becoming scarce assets in the eyes of long-term funds.

Pay attention to the valuation reshaping brought about by the "head effect" and the "foreign capital concept."

Strict regulatory controls on equity transfers (such as penetrative verification of payment ability and credit ratings) will accelerate industry survival of the fittest, benefiting compliant and stable leading institutions. With the relaxation of foreign ownership ratios and the implementation of equity changes, leading public funds with foreign shareholder backgrounds or potential for foreign cooperation are expected to introduce more advanced global asset allocation experience and ESG investment concepts.

In investments in the secondary market or related financial holding platforms, it is recommended to focus on leading public fund affiliates whose research systems have completed "platformization and industrialization" upgrades and have long-term stable performance in equity and fixed income sectors. These assets are expected to gain valuation premiums amid continuous foreign capital inflows.

Beware of the Matthew Effect in the industry: Seeking "small but beautiful" niche tracks

Foreign investment often favors mature platforms with comprehensive market strength, such as China Europe and Huaxia, further intensifying the Matthew effect in the public fund industry. For the vast number of small and medium-sized public funds, under the dual pressure of fee reform and the siphon of leading companies, relying solely on "fund transfusion" is unlikely to break the deadlock.

When investing in the broader financial sector, investors should also pay attention to "small but beautiful" institutions that can avoid the giants' headlines and establish differentiated moats in specific niche sectors (such as quantitative enhancement, REITs, cross-border allocation, or regional wealth management).

In the current market environment, capital can accelerate its positioning, but it cannot replace the accumulation of time. Only institutions that truly create long-term absolute returns for holders can weather cycles.