BlackRock's debut Chinese mutual fund raises $1 billion as George Soros says the world's largest asset manager is making a 'tragic mistake'

© ullstein bild Dtl./Getty Images George Soros is one of the world’s most famous investors. ullstein bild Dtl./Getty Images

  • BlackRock has raised $1 billion for its first China-based mutual fund.
  • The successful launch comes alongside comments from George Soros critical of the firm’s investment in China.
  • “Through our investment activity, US-based asset managers and other financial institutions contribute to the economic interconnectedness of the world’s two largest economies,” BlackRock said in a statement to CNBC.
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BlackRock has raised $1 billion for its China-based mutual fund, the first-ever such offering by a foreign firm, a day after George Soros lambasted the world’s biggest asset manager’s for being too dovish on China’s political system.

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The five-day, ahead-of-schedule fundraise drew from over 110,000 investor orders, signaling robust interest in the novel product. Much of the actively managed fund will invest in cutting-edge sectors like green energy, digitization, and high-end manufacturing, according to a report in the Wall Street Journal on Tuesday.

But the successful launch threatened to be overshadowed by high-profile comments from billionaire financier George Soros, who wrote in a WSJ op-ed that BlackRock was making a “tragic mistake” and misunderstanding Chinese politics.

“The BlackRock initiative imperils the national security interests of the US and other democracies because the money invested in China will help prop up President Xi’s regime, which is repressive at home and aggressive abroad,” wrote Soros, who is head of the liberal philanthropic group Open Society Foundations.

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Soros argued that BlackRock’s growing China focus fails to recognize that the government sees all companies, private or public, as political vessels for achieving its goals, which now includes broad and proactive wealth redistribution.

“That does not augur well for foreign investors,” said Soros.

The BlackRock mutual fund, called the China New Horizon Mixed Securities Investment Fund, launched in August after China’s securities regulators gave the go-ahead. It relies on mainland China-based lenders, including some state-owned companies, for distribution.

“Through our investment activity, US-based asset managers and other financial institutions contribute to the economic interconnectedness of the world’s two largest economies,” BlackRock said in a statement to CNBC.

Earlier in August, BlackRock’s internal research division advised investors to double or even triple their exposure to Chinese stocks to as high as 10% in some cases.

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