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July 2000

Carter’s Chinese legacy





Most chairmen in the last few months of their tenure might be forgiven for winding down their workload and brushing up on their golf swings.
Not so State Street's 60-year-old Marshall "Marsh" Carter, who has cemented a two-year relationship with China's largest bank by signing a groundbreaking asset management deal.
Looking to the huge future potential of the Chinese investment market, State Street is allying with the Industrial&Commercial Bank of China. Under the deal ICBC is appointing State Street as its external asset manager and will also provide support and advice to the US bank on breaking into the Chinese investment market.
Carter, who signed the deal with Tian Ruizhang, ICBC's vice chairman, says State Street, which already has an office in China, has been working towards this deal since 1998 when it began providing ICBC officials with training programmes and seminars in Boston and Hong Kong.
"We are extremely pleased to partner with such a key player in China's economic transformation," he says. "Given its huge labour population of 700 million, the nationwide pension system and open-end mutual fund system China is now contemplating represent a tremendous long-term opportunity for China's investors and for us."
The alliance immediately establishes State Street's presence in China's burgeoning institutional investor community and Carter says it is the first of several strategic steps that the US firm hopes to take with leading Chinese institutions.
What's in it for ICBC? Ruizhang says investment services and asset management are key to its strategic development and the tie-up with State Street will help its provision of these services to Chinese pension and mutual funds. "The forming of our strategic alliance will certainly facilitate our mutual development in the global market," he says.
ICBC has over 38% market share of China's commercial banking industry and in 1998 was the first bank in the country to be authorized to provide custody of which it now has 33% market share. With $400 billion in assets and more than 35,000 branches across China, as well as in Hong Kong, Tokyo, Seoul, Singapore, Frankfurt and Luxembourg it has an international network beyond its domestic power base.
As part of the deal, State Street and ICBC will act as interbank foreign exchange trading counterparties, will co-operate in custody and securities lending and swap information on market trends. State Street will also advise ICBC on the launch of open-ended mutual funds.
As for Carter, at the end of this year he will call time on nine successful years with the Boston institution. During his time in charge, assets under custody have grown from $912 billion to $6.2 trillion and assets under management from $66 billion to $720 billion.
His career included a period in the army and the government before moving into business.
Now he plans to set his sights on education and leadership in community service organizations.
Julian Marshall







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