Bank of China said Tuesday its British subsidiary had bought 30 percent in Switzerland's Heritage Fund Management (HFM) for nine million Swiss Francs (8.7 million dollars).
The bank, one of the country's big four state-owned commercial lenders, said in a statement the subsidiary, Bank of China (UK), intended eventually to raise its share in HFM to 70 percent.
"Primarily, we're attracted by HFM's talent pool, which has rich experience in fund management," bank spokesman Wang Zhaowen said in the statement.
He said other reasons for buying the share included HFM's "mature investment products and its base in Geneva, world-famous for its private banking".
Once Bank of China's share reaches 70 percent, the remaining 30 percent will be held by Jacques Mechelany, a founder of the Swiss asset management firm, the Chinese newspaper National Business Daily said earlier.
HFM was established as a partnership between Mechelany and Banque Heritage, a private bank based in Geneva. It serves pension funds and institutional investors, according to the Banque Heritage website.
It focuses on the Asian market and currently manages six funds with an asset value topping 300 million euros (472 million dollars), the Chinese report said.
Some of the funds suffered heavy losses in the first half of 2008 amid global financial market turmoil, but Bank of China sees this as a good opportunity to buy, it said.
Analysts said the Chinese bank hoped to gain risk management expertise and client resources and improve its wealth management skills from the deal, according to the report.
