Asset management in China is a relatively young industry that is on track for an extended period of strong growth, due to the country’s ageing population and the rising wealth of the expanding middle class.
As a result, China’s investment industry will see its assets under management grow to around $17tn by 2030 from around $2.8tn at the end of last year, according to Casey Quick, the consultancy.
Around half ($8.5tn) of the net new inflows attracted by investment managers globally by 2030 will go to Chinese companies, helping the country to become the world’s second-largest asset management market behind the US.
Casey Quick said that wealthy Chinese business owners along with retail investors would account for half of the expected asset growth by 2030.
Pension assets are projected to grow by around 10 per cent a year, helped by the expansion of workplace retirement savings schemes.
Insurance companies will also outsource more business to third-party asset managers to help boost returns, but new funding for China’s two sovereign wealth funds is expected to be limited, leaving their future growth dependent on asset allocation decisions and market movements.
Foreign managers, however, will face significant challenges in winning new business in China. Foreign managers are expected to capture just 6 per cent of the Chinese market, given the distinct home-country bias that exists among mainland investors and the strong relationships between local investment managers and product distributors.
But further measures to liberate China’s capital markets could benefit foreign managers, who will retain an advantage in international asset markets. Allocations to non-Chinese asset classes are expected to grow to around 17 per cent by 2030 for Chinese institutional investors and to 15 per cent for wealthy individuals.