AS five Chinese mutual funds targeting Ant Group’s hotly-anticipated initial public offering (IPO) kicked off subscriptions Friday, retail investors found the only non-direct channel through which to buy the products was online payment platform Alipay.

Alipay is controlled by Ant, so the unprecedented arrangement, which sidelines banks and brokerages, highlights Ant’s clout in online sales and threatens to disrupt traditional fund sales models.

“This is the first time banks are being excluded from mutual fund sales,” one bank official said.

“For banks, it really hurts. Ant is attempting to break the dominance of banks in fund sales.”

Ant, backed by Alibaba Group, plans a dual listing in Hong Kong and Shanghai’s STAR Market to raise about US$35 billion.

On Friday, money managers, including China Asset Management Co., E Fund Management Co. and Penghua Fund Management, started raising as much as a combined 60 billion yuan (US$8.79 billion) in five funds that will participate in the Ant IPO as strategic investors, with a lockup period of 18 months.

But Ant’s fund sales subsidiary is the sole distributor of the five funds, according to the sales documents.

By bypassing traditional sales channels, Ant is throwing down the gauntlet to banks, analysts said.

“Increasingly, tech-savvy young people are moving money away from bank deposits, into wealth management products being sold online,” said Liu Yun, an analyst at Chasing Securities. (SD-Agencies)