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Global AM firms expanding into Chinese market

Global AM firms expanding into Chinese market

The number of global asset management companies entering the Chinese market are expected to grow to 50 by 2018, according to Z-Ben Advisor, a Shanghai-based AM consulting firm.

Currently, there are 36 global asset managers involved in the fund management businesses in China, which includes onshore investment, outbound investment and advisory.

The country’s mutual fund market, Z-Ben says reached $1.7 trillion this year, ranking second worldwide.

‘It is part of a broader trend of China increasingly opening up to global managers. Multiple government agencies, including People’s Bank of China, are known to be drafting new foreign ownership rules that could allow for majority control of joint venture financial firms,’ it said in a statement.

The consulting firm also noted that it is a multi-year process to access onshore Chinese investors through a variety of schemes, including Qualified Foreign Institutional Investor (QFII), Renminbi-QFII and China Interbank Bond Market.

More recently, global AM firms broadened their ways to access the onshore Chinese market by launching and distributing private funds to Chinse high net worth individuals and institutional (HNWIs) clients.

However, within these 36 global fund houses, currently, only four global asset managers - Fidelity International, UBS Asset Management, Fullerton Fund Management and Man Group - are eligible to tap into the private fund industry, which had $398 billion assets under management by 2016.

Fidelity International launched its first fixed-income private fund to target Chinese HNWIs clients in May.

UBS plans to launch its first private fund in October or November, the company's head of strategy and business development, Aries Tung, told Citywire Asia in July.

Fullerton and Man Group, on the other hand, are expected to launch their private funds by March 2018.

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