Foreign asset managers eye China as industry opens up

Foreign asset managers are eyeing the opportunity to expand their business in China as Chinese regulators are moving forward to integrate the local asset management industry with international practices and standards.

One of the latest examples is that English-language qualification exams became available in May to foreign asset managers who want to apply and register as qualified participants in the Chinese market with the Asset Management Association of China.

"I was delighted to see that AMAC was offering the exam in English. Many of my colleagues have studied for this exam and I was keen to do the same," said Murray Steel, chief operating officer of Man Group Asia.

"I have seen the investment management landscape in China change significantly in just the past four years, not just in terms of the types of strategies available, but also the improving standards of the managers and service providers in the industry," Steel said.

Man Group has been developing its business in China since 2012. It was among the first set of foreign firms to be granted a private fund manager license by the AMAC and the company launched its first onshore fund under the PFM license in December.

"Foreign managers bring a unique set of experience and skill to the Chinese asset management industry, particularly in areas such as quantitative investment. Having a wider set of local and foreign managers managing different strategies in China increases the choice available to investors and, most importantly, it allows investors to diversify their investments," Steel said.

China launched the pilot program in 2016 that allows global firms to set up wholly foreign-owned enterprises to raise onshore funds and invest in the onshore securities market.

Mirae Asset Global Investments was also encouraged by the regulatory moves to further open the Chinese asset management industry.

"AMAC's endeavor to eliminate language barriers will have a profound impact on the globalization of the industry. We believe more and more international practices and expertise will be introduced to local market if exam venues are increased in the coming future," said Hyungkwan Shin, chief executive of Mirae Asset Investment Management (Shanghai) Co Ltd.

Headquartered in Seoul, South Korea, Mirae Asset identifies itself as an expert in emerging markets, which hold the capacity of about 87 percent of its assets under management.

"After decades of rapid economic growth, China has stepped into an aging society...That brings the asset management industry tremendous wealth accumulation and pension assets," Shin said.

"China's asset management industry has witnessed astonishing development by leaps and bounds in recent years, and we have faith that such growth will remain robust in the medium and long term," Shin added.

Mirae Asset started its China business in 2003. The company plans to make both inbound and outbound investments through the comprehensive asset management business in China.

"Mirae Asset will integrate international resources with local expertise and reward investors with reasonable expected return," Shin said.