{"id":7742,"date":"2019-11-07T03:16:04","date_gmt":"2019-11-07T08:16:04","guid":{"rendered":"https:\/\/www.bloomberg.com\/company\/press\/chinas-asset-management-industry-in-transition-the-opportunities-ahead\/"},"modified":"2023-04-12T15:53:21","modified_gmt":"2023-04-12T19:53:21","slug":"chinas-asset-management-industry-in-transition-the-opportunities-ahead","status":"publish","type":"press","link":"https:\/\/www.bloomberg.com\/company\/press\/chinas-asset-management-industry-in-transition-the-opportunities-ahead\/","title":{"rendered":"China\u2019s Asset Management Industry in Transition \u2013 the Opportunities Ahead"},"content":{"rendered":"
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Bloomberg hosted the Buy-side Forum in Shanghai in late October, convening nearly 200 leading asset managers, asset owners, chief executives and technologists from international and local buy-side institutions. Top of the agenda were the opportunities and challenges facing global investors and how data-driven technologies will shape China’s investment management industry, as it undergoes rapid growth and new reform. With the liberalization of China\u2019s asset management sector over the last year, the industry could grow to be the world\u2019s largest by 2030.<\/p>\n

\u201cIn many global markets, the buyside community plays a critical role in defining investment trends and pioneering new technologies,\u201d said Jean Saw, Head of Enterprise Sales at Bloomberg China. \u201cThe opening up of China\u2019s asset management industry to global participation is creating exciting new opportunities for both international asset managers and local buy-side firms.\u201d<\/p>\n

Here are five key takeaways from the forum:<\/p>\n

1. China is one of the top investment destinations<\/strong><\/p>\n

Temasek’s Head of China Yibing Wu pointed out that global fund managers are increasingly optimistic about the opportunities driven by China\u2019s economic transformation. In recent years, it’s investment environment has improved, particularly in the areas of governance, ease of business and support for innovation.<\/p>\n

\u201cWe are in the best market, at the right time and operating in comparably the most favorable investment environment,\u201d echoed Bin Deng, Chief Investment Officer of China Pacific Insurance.<\/p>\n

2. Investors need to understand economic cycles and manage risk <\/strong><\/p>\n

So what do investors need to consider as the world\u2019s largest fund managers start to enter a highly competitive and complex market?<\/p>\n

Wu emphasized that understanding China\u2019s economic cycle and making sound judgement on how the market interacts with the global economic cycle may create unique opportunities for generating alpha.<\/p>\n

In addition, helping investors enhance their risk consciousness and setting reasonable expectations amid different periods of the economic cycle are critical considerations for asset managers tracking China, according to Yan Pu, Vanguard\u2019s Asia Managing Director and Jian Hu, E-Fund\u2019s Head of Fixed Income Investment.<\/p>\n

3. Talent is imperative to China\u2019s asset management industry<\/strong><\/p>\n

As China\u2019s asset management industry undergoes transformation, the war for talent will be both an opportunity and challenge, said Freddy Wong, Head of Business Strategy and Development of Fixed Income for Invesco in Asia Pacific. As more foreign asset management companies are licensed to set up private equity and mutual funds in China, the buyside sector will face a talent gap for experienced portfolio managers and analysts.<\/p>\n

What do global investors look for when selecting local asset managers to partner with? Ruth Gao, Head of China at Goldman Sachs Asset Management mentioned a few key criteria when assessing talent \u2013 strategic thinking, ability to work in teams, track record and having a risk-taking mindset. Global investors at forum tend to favor companies with stable, high-performing investment teams over star fund managers.<\/p>\n

4. Chinese bond holdings have the potential to grow <\/strong><\/p>\n

Foreign holdings of Chinese bonds have risen to over US$2 trillion as of July this year. However, foreign capital into bond funds managed by Chinese asset management companies remains limited. At the forum, investors agreed that a few key challenges exist, including mutual recognition of funds between China and other jurisdictions, eligibility of bond funds under CIBM Direct and Bond Connect, credit rating gaps and the availability of more sophisticated instruments, including bond ETFs.<\/p>\n

5. Data and technology will drive investments<\/strong><\/p>\n

In a live poll conducted at the forum, sixty percent of participants believe that the most critical tool for sound investment decision making is an advanced investment and risk management system. Forty percent of respondents say quality data is most important.<\/p>\n

Jia Zhu, Senior Product Director of Ping An Asset Management, highlighted the importance of data quality and data governance, and shared how the firm is leveraging external and internal data and technology resources to build a proprietary database that enables seamless workflow across investment teams.<\/p>\n\n<\/div>\n\n\n<\/div>\n\n\n\t\t\n\t<\/div>\n<\/div>\n

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Yibing Wu, Head of China, Temasek, delivered a keynote speech at the Buy-side Forum in Shanghai.<\/figcaption>\n<\/figure>\n
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Freddy Wong, Head of Business Strategy and Development of Fixed Income for Invesco in Asia Pacific, discussed China’s asset management transformation with Rachel Li, Fixed Income Specialist from Bloomberg.<\/figcaption>\n<\/figure>\n
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Executives from China Pacific Insurance, E-fund, Vanguard and Goldman Sachs Asset Management discussed investment and risk management in China’s market.<\/figcaption>\n<\/figure>\n
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Executives from Meridian Global, Ping An Asset Management, and Huatai-Pinebridge Fund Management discussed the application of data-driven technologies in investment management.<\/figcaption>\n<\/figure>\n<\/p>\n\n<\/div>\n\n\n\t\t\n\t<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

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