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Alibaba’s Ant Financial Has Strategic Partnership with Vanguard

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Jun. 27 2019, Published 3:12 p.m. ET

Vanguard set up China unit in 2017

Ant Financial and Vanguard Group have formed a joint venture based in Shanghai, China, according to government records that cite Caixin Global. Vanguard is an American asset management firm. It set up its China subsidiary in Shanghai in 2017. Ant Financial, on the other hand, is an Alibaba (BABA) financial services affiliate. Ant’s range of services includes processing mobile payments for consumers and merchants, funds management, and making consumer and business loans. Ant is the name behind Alipay, which along with Tencent’s (TCEHY) WeChat Pay, controls more than 94% of China’s mobile payment market, according to estimates from iResearch China.

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Joint venture to focus on investment consulting

The Ant-Vanguard joint venture was registered with initial capital of $2.9 million, and the records show it will focus on providing financial services, including investment consulting. Though details of the joint venture’s operations are limited, the arrangement could allow Ant to offer certain Vanguard services to its customers in China, which could in turn enable it to make more money. A few years ago, Ant Financial sought to purchase American remittance company MoneyGram (MGI) for $1.2 billion, but the White House thwarted the deal on national security concerns.

Ant Financial gave Alibaba $77 million profit in March quarter

At the moment, Alibaba has a profit-sharing agreement with Ant Financial. In the last quarter ended March, Alibaba booked $77 million profit courtesy of its profit-sharing arrangement with Ant Financial. Amazon’s overall profit for the quarter was $3.8 billion in the March quarter. Amazon (AMZN) and JD.com (JD) posted profits of $3.6 billion and $1.1 billion in the March quarter.

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