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China: The new frontier for foreign asset managers

Portrait of Alain Le Couédic
Partner
Hong Kong Office, Eastern Asia
+852 3757-9488
June 30, 2016

Ongoing growth in BRIC economies has set a hunt in motion to find new asset management and investment opportunities in emerging markets. In this THINK ACT publication, we turn towards one of Asia’s largest new asset management sectors: China. China is set to flourish as a powerhouse player in future globalized economies, and there are good reasons to invest now. Our research shows that strong fundamentals, ongoing deregulation, product innovation, and cross-border opportunities are only a few reasons leading asset managers and foreign players are eagerly exploring this growing market.

In comparison to 2010, growth in China has actually slowed—yet many foreign firms see this as an advantage in terms of both market health and sustainability. Recent reforms, deregulations, and newly opened channels of access have lead to greater flexibility for foreign firms interested in investing in China’s underlying markets. After a close examination of new policies, we investigate the opportunities and challenges that may face international investors. High on the list is the constant fluctuation of both products and clients, as well as calls for diversification in investment opportunities. Regardless of recent market relaxations, at this time global players should anticipate market volatility.

Strategic and informed choices are the way forward for foreign asset managers. While interest in investing in China continues to grow, Chinese investors are likewise demanding alternative assets both within the country and in overseas markets. This two-way, cross-border path requires different dynamics—and forward-thinking managers have already begun to increase the proportion of Chinese bonds in their global fixed-income benchmarks. Many firms are already exploring current vs. local future setup to strengthen client services on both sides of the equation. The outline of the Chinese market’s evolution that we present here proves that there’s strong competition and promising long-term potential ahead.

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Think:Act

China: The new frontier for foreign asset managers

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New trends and fresh insights to best navigate one of Asia's largest asset management markets

Published June 2016. Available in