SHANGHAI (Reuters) – As 5 Chinese language mutual funds concentrating on Ant Group’s hotly-anticipated IPO kicked off subscriptions on Friday, retail traders discovered the one non-direct channel by which to purchase the merchandise was on-line fee platform Alipay.
Alipay is managed by the Chinese language fintech large itself, so the unprecedented association, which sidelines banks and brokerages, highlights Ant’s clout in on-line gross sales and threatens to disrupt conventional fund gross sales models.
“This is the first time banks are being excluded from mutual fund sales,” one bank official stated, talking on situation of anonymity.
“For banks, it really hurts. Ant is attempting to break the dominance of banks in fund sales.”
Ant IPO-ANTG.HK, backed by Alibaba Group BABA.N, plans a twin itemizing in Hong Kong and Shanghai’s STAR Market to lift about $35 billion in what might be the world’s largest preliminary public providing.
On Friday, cash managers together with China Asset Administration Co, E Fund Administration Co and Penghua Fund Administration began elevating as a lot as a mixed 60 billion yuan in 5 funds that may take part within the Ant IPO as strategic traders, with a lock-up interval of 18 months.
However Ant’s fund gross sales subsidiary is the only distributor of the 5 funds, in keeping with the gross sales paperwork.
Ant didn’t instantly reply to a Reuters request for remark.
By bypassing conventional gross sales channels, Ant is throwing down the gauntlet to banks, analysts stated.
“Increasingly, tech-savvy young people are moving money away from bank deposits, into wealth management products being sold online,” stated Liu Yun, an analyst at Chasing Securities.
By the shut of enterprise, Ant’s commercial selling the newly-launched funds drew greater than three million clicks on its super-app Alipay.
An investor who gave solely his surname, Han, purchased 10,000 yuan worth of the Penghua fund, saying investing in Ant entailed little danger.
However others balked on the funds’ 18-month lock-up interval.
“If I buy the funds now, I can only take out the money in 2022,” stated retail investor Liu Xiaobing. “That’s not efficient use of capital.”
Reporting by Samuel Shen, Luoyan Liu and Andrew Galbraith; Enhancing by Clarence Fernandez