The Chinese firm recognises that for its wealthy clients, there's no hard boundary between financial assets and health. In conversations with clients, the topic of health management keeps coming up.
Hywin Holdings, the Chinese wealth manager, is taking a controlling stake in Life Infinity as part of a push into the country’s health management sector.
As part of the deal, Hywin is raising a total of more than RMB140 million ($20.7 million). It has entered into share transfer agreements and a capital increase agreement with Beijing iLife3 Technology, a health management service provider in China and Hywin’s existing shareholders.
Hywin, which is listed on the Nasdaq exchange, said it expects the transaction to be completed by the end of August, subject to customary closing conditions. Once the transaction is complete, Life Infinity will be accounted for as a consolidated subsidiary of Hywin.
Explaining its rationale for the deal, Hywin said that China’s healthcare sector has been growing at a double-digit pace to become a multi-trillion-dollar market.
“With rising affluence and an ageing society, health management has become a priority for the families of Hywin clients in China, and a pressing topic for their wealth management advisors,” it said.
Hywin said it has been researching the sector for several years, and notes that clients raise the topic in conversations. The firm recently launched the FactSet Hywin Global Health Care Index.
“This transaction is the natural culmination of Hywin’s intellectual efforts in the health management space, and very much in response to client needs,” Madame Wang Dian, chief executive of Hywin, said. "This acquisition represents another milestone in our strategic plans to unlock growing value from our enormous client franchise. This also makes Hywin the first independent wealth manager in China to integrate wealth and health into one holistic proposition, with cross-selling opportunities and cost synergies that naturally occur along with the wealth-health continuum.”
Lawrence Lok, Hywin’s chief financial officer, said: “The health management business will expand Hywin’s sources of revenues and further strengthen our client relationships. The complementarity of wealth and health will ensure our shareholders capture value from the two most important and systemic needs of China’s affluent population.”
Hwyin operates from 178 service centres across China and employs more than 1,600 relationship managers.