“Asset management service” is the financial service provided by banks, trusts, funds, futures agencies, insurance asset management agencies and other financial institutions as instructed by an investor to invest with or manage the investor’s assets held by them in trust. In these cases, the relevant financial institution shall act for and on behalf of the principal with due diligence and will charge the principal a management fee, and the principal shall bear all risks arising out of, and receive all the proceeds generated from, the investment made by the financial institution.
Based on the principal-agent relationship, the asset management service is able to provide each investor with a financial service on a case-by-case basis to the extent permitted by law. It is strategically designed to improve the efficiency of the capital market, protect the investors’ rights and interests and promote the real economy.
Legal Services for Asset Management
JunHe is a pioneer law firm practicing in asset management and maintains a leadership position in providing asset management-related legal services. JunHe has been active in asset management services provided by various institutions, accumulating vast experience in advising all kinds of institutions. The “Asset Support Plan for PICC Investment Holding – Great Wall Guoxing Financial Leasing Project” advised by JunHe won the second prize in the “The First Contest of the Design of Insurance Asset Management Innovative Products” organized by the Insurance Asset Management Association of China.
JunHe provides asset management institutions with legal services in all respects, including product structure design, legal due diligence review, project negotiation, transaction document drafting and amendment, mortgage (pledge) procedures, issuance of legal opinions, and assisting asset managers with post-management.
With years of development, JunHe has grown into a law firm with a professional asset management practice team comprising of more than 30 partners, counsels and associates. JunHe has participated in many successful and influential cases in the industry, and is capable of providing a full chain of legal services to commercial banks, trust companies, securities companies, fund managers and other asset management agencies. JunHe’s professionalism and extensive experience in advising on asset management law is widely recognized and it is regarded by the market as one of the best law firms in China that is able to provide comprehensive legal services in regard to asset management.
Recent Representative Cases
Investment by China Life Asset Management Company Limited et al. in a private equity fund through a trust scheme
China Life Asset Management Company Limited (“CLAMCL”) subscribed for beneficial units in the trust. The investment amount was RMB 10 billion. The trust company represented the trust scheme to act as the limited partner of the private equity fund and paid the capital commitment to the private equity fund with the capital of the trust. The specific purpose of the private equity fund was to invest in a project company wholly owned by Shaanxi Coal and Chemical Industry Group Co., Ltd. The project was the first debt-to-equity swap project in the insurance industry, and had a certain degree of complexity, as the applicable laws did not contain clear provisions. JunHe provided the client with an all-inclusive solution and assisted the client in completing the investment successfully.
Ping An Real Estate Co. Ltd. founded the “Plan of Ping An Real Estate – Changsha Pilot Investment for Investment in Commercial Real Estate Debt”
Ping An Real Estate Co., Ltd. established the “Plan of Ping An Real Estate – Changsha Pilot Investment for Investment in Commercial Real Estate Debt”. Ping An Real Estate used the insurance funds held by it in trust under such a plan, to make a debt investment in the financial tower developed and constructed by Changsha Hengchengye Real Estate Co., Ltd. JunHe conducted a legal due diligence review in respect of the project and advised on, and issued legal opinions with regard to, the compliance of and legal risks over Ping An Real Estate’s investment in the project, through the real estate debt investment plan above.
China Universal Capital’s series asset management plans for equity investment
China Universal Capital Management Co., Ltd. founded several specific asset management plans, raising funds to purchase equity interest in a large real estate company through a SPV. JunHe assisted the client in establishing the asset management plans and drafting the transaction documents, and provided the client with legal opinions in respect to the compliance of the asset management plans.
CR Trust•UPSUN No. 38 Pooled Trust for Investment in Rongtong Investment Following and Equity Investment
CR Trust founded a pooled trust scheme, raising up to RMB 6 billion funds to invest in an equity investment fund. The purpose of the equity investment fund was to make equity investment. JunHe assisted the client in founding the trust, drafting transaction documents and providing legal opinions with respect to the compliance of the trust scheme.
Cooperation between a commercial bank on the one hand, and a securities company and a fund manager on the other hand, in TRS
A commercial bank on the one hand, and a securities company and a fund manager on the other, cooperated to effect a TRS, setting up a TRS structure in order to invest in specific targets. The TRS involved complicated financial derivative trading, and therefore the transaction structure of the project needed to conform to the applicable regulations.
Cooperation between a commercial bank and a securities company in a precious metal hedging transaction
A commercial bank was qualified to conduct hedging derivatives transactions but did not have the qualification for gold transactions. In order to practice in gold trading, the commercial bank cooperated with a securities company that had a gold exchange qualification to conduct a precious metal hedging transaction. JunHe assisted in the design of the transaction structure and advised on the compliance of the transaction structure.