(Yicai) June 5 -- The Qatar Investment Authority has reached a preliminary agreement with Chinese investment firm Primavera Capital to buy a 10 percent stake in China Asset Management, the country’s second-largest mutual fund manager by assets, and the deal is under review by the securities regulator, Yicai learned from an industry insider.

The acquisition is pending approval from the China Securities Regulatory Commission, the person said, without disclosing the purchase amount.

There were signs of an impending large share sale at the end of last month when ChinaAMC applied to the securities regulator on May 23 for the greenlight regarding a change in ownership of more than 5 percent equity. The review is normally done within 60 working days.

ChinaAMC is owned by brokerage CITIC Securities, which has a 62.2 percent stake. Canadian investment management firm Mackenzie Financial Holding is the second-largest shareholder with 27.8 percent equity and Primavera Capital, which is under Tianjin Haipeng Technology Consulting, owns the remainder.

Hong Kong-based Primavera Capital first announced its intention to sell its 10 percent stake two years ago. In June 2022, Citic Securities waived its right to have first option to buy and stipulated that the sale should not be less than USD490 million.

This is the second investment in a Chinese company by the Qatar Investment Authority in the last six months. In December last year, the Doha-based fund, which is the eighth biggest sovereign fund in the world with USD526 billion under management as of March 31, injected USD200 million into software firm Kingdee International Software Group.

Despite frequent market shocks in recent years, ChinaAMC has stayed profitable. Last year it raked in net profit of CNY2 billion (USD276 million) on revenue of CNY7.3 billion (USD1 billion). In 2022 it posted net profit of CNY2.1 billion and revenue of CNY7.4 billion and in 2021 it logged net profit of CNY2.3 billion on revenue of CNY8 billion.

The Beijing-based fund manager had CNY1.5 trillion (USD208.5 billion) of assets under management as of March 31, and 435 financial products in its name, according to Wind data.

Middle Eastern sovereign wealth funds have been accelerating their investment in China, according to Global SWF, a data platform that tracks sovereign wealth funds. They have pumped USD7 billion into the country since June last year, more than five times the amount in the previous 12 months.

Editor: Kim Taylor