China’s Second-Largest Fund Manager Sets Sights on Global Expansion
Breaking into New Markets
China Asset Management Company, the country’s second-largest fund manager, is gearing up to launch funds in the United States and Brazil this year, marking a significant push into international markets. According to CEO Li Yimei, the state-majority owned fund manager is seeking a partner in the U.S. to cater to American retail investors, despite the likelihood of escalating tensions between Washington and Beijing.
A Bold Move
The move overseas is a strategic effort to expand the investor pool and attract global participants who have been hesitant to invest in China due to concerns over its slowing economy. Li Yimei is confident that Chinese assets will rebound, driven by Beijing’s economic stimulus packages designed to counter the impact of global challenges.
Overcoming Doubts
While some U.S. investors may harbor doubts about products from a Chinese fund manager, Li believes that others will be more open-minded. “It would be great for us to fulfill the demand of those who don’t,” she said. The company’s Hong Kong unit has already seen significant interest from international investors and mainland institutions, with assets under management doubling to exceed HK$100 billion last year.
New Frontiers
Li is optimistic about attracting new flows from the Middle East, Latin America, and Southeast Asia. The company’s partnership with Oman’s Jabal Asset Management and the introduction of a China equity long-only fund in the country are testaments to its growing international presence. A potential ETF cross-listing program with Brazil, announced during Chinese President Xi Jinping’s visit to Brasília, could further boost the company’s global reach.
Challenges at Home
However, Chinese asset managers are facing challenges at home, with lower margins due to squeezed fees as institutional flows become more dominant. The influx of government-backed investors, dubbed “national teams,” has been pumping money into the stock market via large ETFs, with ChinaAMC being one of the primary beneficiaries.
Government Confidence
Li views the government’s intervention as a sign of long-term confidence in the market. “National teams entered at market lows to boost sentiment, and it shows the government’s long-term confidence,” she said. As China Asset Management Company expands its global footprint, it remains committed to navigating the complexities of the domestic market.
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