25
China: The World’s Best Opportunity for Asset Managers?
| Expanding Internationally
Of course, there is always the
possibility that when demand
emerges, global players will reverse
course and put a large amount
of resources into enhancing their
China-specifc research and execution
abilities. Many frms already rely
on their Hong Kong offces to
provide such information — simply
an expedient, in our view, as the
frms that have an onshore research
presence have demonstrated
considerably stronger returns. Of
course, data in this regard remains
extremely limited, purely due to the
small number of observations. Once
again there is also considerable
sample bias, as frms with an extensive
onshore presence are also those that
have been offering China exposure
the longest, and as a result, have had
a much longer time to develop their
expertise. Regardless, over the next
several years all global players will be
facing additional competition from
regional players for assets targeting
China, and home-feld advantage (for
the assets sourced) will only go so
far in assuring robust asset infows.
If offshore Chinese subsidiaries
have preferential access to domestic
markets and frst crack at building
their brands, infows that would
have otherwise gone to international
heavyweights may instead fll the
coffers of China AMC or Harvest.
Under the Surface
Tight liquidity within China,
particularly over the last two
years, means that there has been
considerable demand for additional
credit. Authorities have been reluctant
to allow banks to extend additional
loans, wary of potentially replicating
the expansion that occurred in 2008,
as a response to the global fnancial
crisis. This has led to a sizable amount
of under-the-radar fnancing schemes,
which have understandably drawn
the ire of regulators concerned
about unsustainable macroeconomic
expansion. Demand for better
investment returns is the other side
of the equation, and a handful of
Exhibit 17: Chinese Fund Management Companies with Hong Kong Subsidiaries
RQFII has allowed Mainland Chinese asset management companies to raise assets in Hong Kong
Company Name
Parent Company Date of Approval
Date of
Establishment
Registered Capital
(mm HK$)
Bosera Asset Management
(International) Co., Limited
Bosera
30/12/2009
05/11/2010
50
China Asset Management
(Hong Kong) Limited
China AMC
22/8/2008
10/12/2008
100
China International Asset
Management (HK) Limited
China International
11/12/2010
8/3/2011
N/A
China Universal Asset
Management (Hong Kong)
Company Limited
China Universal
13/5/2009
19/02/2010
100
CSOP Asset Management
Limited
Southern
27/6/2008
29/09/2008
200
Da Cheng International Asset
Management Company Limited
Dacheng
13/5/2009
14/10/2009
60
E Fund Management (Hong
Kong) Co., Limited
E-fund
27/6/2008
02/01/2009
120
Fortune SG Asset Management Fortune SG
14/11/2011
N/A
N/A
GF International Asset
Management Limited
Guangfa
1/9/2010
9/8/2011
N/A
Harvest Global Investments
Limited
Harvest
27/6/2008
11/11/2010
60
HFT Investment Management
(HK) Limited
HFT
8/2/2010
27/10/2010
60
HuaAn Asset Management
(Hong Kong) Limited
Huaan
26/5/2010
01/12/2010
100
ICBC Credit Suisse Asset
Management (Intl.)
ICBCCS
13/6/2011
11/1/2011
N/A
Lion International Asset
Management Limited
Lion
20/01/2011
N/A
N/A
UBS SDIC Asset Management
(HK)Limited
UBS SDIC
16/12/2010
10/1/2011
N/A
Source: Z-Ben Advisors, Hong Kong SFC