Asset managers should hurry to enter difficult Chinese market

DragonAssets under management in China's funds industry will grow 13.6% a year to reach RMB4.6 trillion (€550 billion) in 2015, according to Cerulli. But the research firm warns the country is getting more difficult for foreign asset managers to access.

The only way foreign firms can distribute funds to Chinese retail investors, which Cerulli says account for 81% of Chinese assets under management, is by setting up a joint venture with a local partner, in which the foreign partner can own no more than 49%.

For a firm aiming to set up in China, choosing the right local partner “might be the single most important decision they have to make”, said the research company.

Before the financial crisis, foreign firms were able to buy 40% stakes in Chinese asset managers for as little as 1.3% of assets under management, said Cerulli. But prices have since risen and are likely to increase in future.

"This means that fund managers need to position themselves now to take advantage of the longer-term opportunities that this market offers," said Ken Yap, head of Cerulli's Asian research practice.

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