© Reuters. PHOTOGRAPHY: Amundi logo seen at their headquarters in Paris, France, October 7, 2015. REUTERS / Philippe Wojazer
By Selena Lee
HONG KONG (Reuters) – Europe’s largest asset manager Amundi has raised more than $ 11 billion in assets from Chinese investors since it became the first foreign-controlled joint venture (JV) 15 months ago to launch business in the country.
Huihua Wealth Management, 55% owned by Amundi, and the rest of the Bank of China, the country’s fourth-largest lender, was launched in September 2020 as Beijing opened its booming wealth market to thriving foreign companies. All Huihuine products are distributed by the Bank of China.
The powerful impact of Amundi’s venture comes as global giants like BlackRock 🙂 (NYSE :), Schroders (LON 🙂 and UBS have been moving towards forming similar majority-owned ties since Beijing first allowed it in 2019.
“At the household level, less than 20% of wealth is invested in financial assets, which means there could still be a big shift in wealth from deposits and newly earned income to financial assets, wealth management and funds,” Zhong Xiaofeng, Amundi’s president. , he told Reuters in an interview Thursday.
Chinese banks dominate the distribution of equity and third-party wealth products in the country.
BlackRock’s joint venture for majority-owned wealth with China Construction Bank (OTC 🙂 was launched in May last year, with the introduction of two wealth management products, which mainly serve clients of Chinese bank’s private banks.
Amundi and BlackRock’s ventures are the only platforms for wealth with a majority foreign population working and working.
Faced with declining fees, asset managers in developed markets are chasing growth and seeking to expand into customer-oriented wealth segments.
They see a huge opportunity in China, where the local $ 4.4 trillion wealth management market expanded by almost 8% in the first nine months of 2021.
Most of Amundi’s wealth of JV supply is in strategies aimed at generating returns higher than fixed income. A small percentage of the assets are in shares.
Globally, Amundi had 1.81 trillion euros ($ 2.05 trillion) in management last September.
Huihue’s 70 billion yuan ($ 11 billion) assets were distributed to more than 100 products by the end of last year.
Despite a good performance in the venture with the Bank of China, not everything went smoothly for Amundi in the country.
Amundi’s joint venture fund with Agricultural Bank of China (OTC :), in which Amundi owns 33%, reported € 16.3 billion in outflows in the first nine months of 2021, according to the company, as the Chinese bank withdrew assets from its own subsidiary fund.
Zhong said that the buyout was due to the Chinese regulatory audit of the fund management industry between 2018 and 2021.
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