China’s asset management industry tops $7.5trn

9 Feb 17

Assets under management across mainland China rose by 36% to 51.8trn renmimbi ($7.53trn, £6.0trn) in 2016 according to data from the semi-official Asset Management Association of China (AMAC).

The figure is for all mutual and private fund management houses and securities and futures firms in China.

But the yearly growth rate has slowed from 86% in 2015, AMAC data showed, amid a regulatory crackdown on fund subsidiaries as well as private securities fund companies, which both target mainly institutional or high net worth investors.

China’s asset management business (RMBtrn)

	2016 (y-o-y growth)	2015 (y-o-y growth)	2014
Mutual funds under fund management companies	9.16 (+9%)	8.40 (+85%)	4.54
Fund subsidiaires	16.89 (+34%)	12.60 (+114%)	5.88
Securities companies	17.58 (+48%)	11.89 (+50%)	7.95
Futures companies	0.28 (+180%)	0.10 (-17%)	0.12
Private fund management (paid-in capital for hedge, VC and PE)	7.89 (51%)	5.21 (+145%)	2.13
Total	51.8 (+36%)	38.2 (+86%)	20.5

Source: AMAC

Mutual fund assets had a slight expansion after the demand in bond funds offset the outflows in equity and money market products.

Overall committed capital for PFM assets reached RMB 10.2trn, surpassing that of mutual fund assets for the first time.

The PFM companies can be categorised as private securities funds, or more commonly known as hedge funds, private equity and venture capital funds.

Foreign managers setting up an investment management wholly foreign-owned enterprise (WFOE) to launch investment products, such as Fidelity, will be competing with onshore managers of private securities funds, which are similar to hedge funds.

Total AUM under the private securities fund business hit RMB 2.6trn at the end of 2016, up 51% from a year ago. The number of such products also surged 71% to 25,950.

A further look at the number of registered PFM companies showed a significant drop from 2015.

Number of registered PFM companies