Institutional Asset Manager Newsletter

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NEWSLETTER | 27 Nov 2020

China: The jewel in the asset manager’s crown?

China’s aggressive foreign policy stirred up controversy this week, as trade sanctions were placed on Australian exports and skirmishes in the South China Sea continued to raise tensions with its neighbours. Relations with the US are also not expected to see great improvements as President Elect Joe Biden takes office in the new year.

None of this has dented the ambitions of global asset managers as they vie for a foothold in the USD2.6 trillion Chinese mutual funds market. Swiss money manager Pictet Asset Management joined BlackRock, Fidelity International and Vanguard in setting up shop in Shanghai since market liberalisation in April.

Investors see China’s growth as too important a trend to miss out on, with President Xi Jinping recently proposing to double the size of China’s economy by 2035 at a Communist party conference.

Legendary China investor Jack Perkowski, who invested USD400 million in the country in the 1990s, says that the country remains the biggest opportunity in the world, but warns that tough competition from local and foreign investment managers will present an uphill battle for asset managers entering the country.

There are also positive signs that investors want a more diverse range of fund options, to broaden China’s retail market which is dominated by safe-haven money market funds. China’s first ever negative yielding bond was more than four times oversubscribed at its launch last Friday.

Globally, fixed income has continued to attract investors away from riskier equity funds, with bond funds garnering an extra USD220.5 billion in inflows in the last quarter.

China’s growth could be scuppered, according to separate reports from the FSB and Pictet, as the country is in line to feel climate change’s worst effects this century. Rising global temperatures could slash asset prices and China could wind up being 25 per cent poorer by the end of the century.

Meanwhile, China’s rising asset management centre doesn’t appear to be causing Europe too much pain yet, where assets under management are expected to hit another “historical height” by the end of 2020.

maddy taylor signature.png

Madeleine Taylor
Editor, Institutional Asset Manager
maddy.taylor@globalfundmedia.com

Legendary ‘Mr China’ investor explains why global asset managers will struggle to crack Chinese market

Fri | 27 Nov 2020, 11:32

China is seen as the jewel in the asset manager’s crown after foreign ownership restrictions in the industry were relaxed in April. Global firms including BlackRock, Fidelity International and Vanguard have applied to set up wholly-owned mutual fund units in China, hoping to tap the country’s fast-growing USD2.6 trillion retail fund market.

Fri | 27 Nov 2020, 11:32

The European asset management industry is back on track for another year of growth, according to industry body The European Fund and Asset Management Association (EFAMA) – with assets under management rebounding strongly after being hit by the coronavirus crisis in the first quarter of 2020.

Fri | 27 Nov 2020, 11:32

A new survey of institutional investors in Germany and the US who collectively manage EUR44.37 billion of assets, reveals 80 per cent believe the German Government has delivered a much more comprehensive package to support its economy and jobs than other major nations.

Fri | 27 Nov 2020, 11:32

The Street Global Investor Confidence Index increased to 90.7 in November, up 10.6 points from October’s revised reading of 80.1.

LGIM surpasses GBP100bn in DC assets

Fri | 27 Nov 2020, 11:32

Legal & General Investment Management (LGIM) has passed GBP100 billion in defined contribution (DC) assets under management (AUM).

Copper launches first DeFi tool for institutions

Fri | 27 Nov 2020, 11:32

Copper.co, a London-based digital asset infrastructure provider, has launched CopperConnect – a dedicated decentralised finance (DeFi) tool for crypto institutions.

Fri | 27 Nov 2020, 11:32

Zug-based Asset and Currency Manager QCAM Currency Asset Management has launched FX BIAS, a new trading strategy that is based on business climate surveys and is offered to investors via a UBS certificate.

Fri | 27 Nov 2020, 11:32

SEB, a leading Nordic corporate bank, has launched a new ESG assessment methodology that quantifies how environmental, social and governance (ESG) factors affect companies’ financial performance, with universally positive early feedback from institutional investor clients.