France's Edmond de Rothschild eyes 15% stake in Chinese FMC

La Compagnie Financiere Edmond de Rothschild Banque (LCF Edmond de Rothschild), a European private bank with the longest history, plans to spend about RMB 100 million (US$14 million) to buy as much as 15% stake in Chinese fund house Zhonghai Fund Management Co, positioning itself as the first foreign private bank to hold a stake in a mutual fund manager in China, sources reported.

The French bank has being in talks with the shareholders of Zhonghai for more than one year, the people familiar with the situation said, an investment unit of state-owned Yunan Tobacco, which holds about 15.385% stake in Zhonghai, agreed to sell its shares to the French bidder.

But the two sides have not inked any legally binding documents, the people added, and the deal is still subject to the Chinese regulatory approvals. No comments are available currently from both sides.

LCF Edmond de Rothschild owns a representative office in Shanghai and acquires an investment license to invest in Chinese capital markets, with a total investment quota up to US$100 million.