China emerges as fifth biggest Euroclear shareholder
Central bank’s sovereign wealth fund for investing foreign reserves has held stake for at least 5 years
China’s main sovereign wealth fund for investing its foreign reserves has emerged as the fifth-biggest shareholder in Euroclear, one of the world’s largest central securities depositories.
The State Administration of Foreign Exchange (Safe), a unit of China’s central bank, owns a 4.26 per cent stake in the Belgian company, according to recently-published filings on Euroclear’s website.
It has held the stake for at least four years but has only come to light in recent weeks because Euroclear is making more information publicly available as a prelude to changing its shareholding structure.
It is currently owned by its users but its board is exploring a trade sale, the sale of a block of shares, or an initial public offering as a way to allow smaller shareholders to sell their stakes.
Euroclear is crucial to the daily operation of financial markets, holding collateral and settling trades on behalf of investors. It holds more than €28tn of assets in custody.
According to the filings on the Euroclear website, the Safe stake is owned by a separate company called Kuri Atyak Investments Limited, which is registered in the British Virgin Islands.
Kuri Atyak also has a seat on the board of the holding company, held by Xiaomei Fan. Her biography on the Euroclear website details that she is a graduate from the Beijing Institute of Technology and an authorised representative of Kuri Atyak but there is no mention of Safe. Another Safe representative, Yuxin Du, sits on the board of the operating company. Both Safe and Euroclear declined to comment.
Although Euroclear takes in business from around the world, only 14 per cent of its clients are headquartered in Asia, where it also competes for business with Deutsche Börse’s Clearstream.
Its four biggest shareholders are Sicovam, the French securities manager, Intercontinental Exchange, the London Stock Exchange Group and JPMorgan.
Last spring it appointed Goldman Sachs to research strategic options for smaller shareholders to cash out, after some large holders sold to Intercontinental Exchange and the LSE group.
Euroclear has delayed a decision on its ownership structure until the first quarter of next year after disagreement between shareholders over the future of the company. This has deterred some potential private equity buyers, including Hellman & Friedman, CVC Capital Partners and GIC, Singapore’s sovereign wealth fund.
Nearly 73 per cent of Euroclear is held by the top 20 shareholders, while the remaining 27 per cent is owned by 95 shareholders who own stakes of 1 per cent or less.
Two local Belgian government investment funds and four Belgian insurers are working to create a consortium that could buy a 10 per cent stake in Euroclear, De Tijd newspaper reported earlier this month.