Asset management: 12 rules for success in China
China’s asset management industry barely existed 20 years ago. By 2030 it will be the world’s second largest. There are myriad ways for foreign firms to get it right – or horribly wrong. Here are Euromoney’s precepts for a better chance of winning – and avoiding failure.
It’s hard to believe that China’s asset management industry didn’t exist until 1998, or that the first foreign-invested joint venture didn’t open for business for another five years.
Since then, the industry has boomed, growing from $1.55 billion in total assets under management (AuM) at the end of 1998 to $2 trillion at the end of 2018. KPMG tips that number to hit $5.6 trillion by 2025, making China the second-largest asset management market in the world.
Local operators such as Citic Pacific, Huarong Asset Management and China Cinda Asset Management still dominate. KPMG reckons 51.3% of the onshore fund management industry was controlled by 10 leading local firms at the end of 2019.
That’s the handiwork of regulators who spent the last two decades working hard to temper the growth of foreign players, while supporting China’s big guns.
New types of product or distribution partnerships will emerge
But times are changing. This dominance will be shaken as more local players, including domestic technology firms, enter the market. They will jostle for new clients and money with global banks, insurers and asset managers.