China Asset Management Company, China’s second-largest fund manager, plans to launch funds in the U.S. and Brazil in 2023. CEO Li Yimei seeks partnerships to attract foreign investors and capitalize on revitalized interest in Chinese assets, despite ongoing geopolitical tensions. The company has seen significant growth in assets and continues to foster international partnerships, particularly in the Middle East and Latin America, to bolster its investment strategy.
China Asset Management Company (ChinaAMC), the second-largest fund manager in China, is set to launch investment funds in the United States and Brazil this year, as revealed by CEO Li Yimei. The move is aimed at attracting renewed investor interest in Chinese markets, despite increasing tensions between the U.S. and China. ChinaAMC, which manages assets totaling $350 billion, is also seeking to establish a partnership in the U.S. to facilitate fund offerings for American retail investors. In Brazil, the firm is awaiting regulatory approval to introduce a cross-listing exchange-traded fund (ETF). Li emphasized that these launches would be unprecedented for both countries.
Li remarked, “If the mountain will not come to us, then we will go to the mountain” during her recent interview. This strategy reflects the efforts of Chinese fund managers to broaden their investor base and restore confidence from global investors who have reduced their exposure to China over the past two years due to economic concerns. Li expressed confidence that despite potential challenges, Chinese assets would rebound as Beijing seeks to implement sufficient economic stimulus.
While U.S. investors may harbor skepticism towards Chinese fund offerings, Li believes there exists a segment that would appreciate and demand such products. Last year, ChinaAMC’s Hong Kong unit witnessed strong interest from both international and mainland institutional investors. Their assets under management surged to over HK$100 billion ($12.84 billion). Furthermore, Li indicated optimism in attracting investments from the Middle East, Latin America, and Southeast Asia.
In a significant development, Qatar’s sovereign wealth fund recently acquired a 10% stake in ChinaAMC, marking a notable entrance by a Middle Eastern investor. Additionally, ChinaAMC has partnered with Oman’s Jabal Asset Management to launch a China equity long-only fund, the first of its kind managed by a Chinese firm in Oman. ChinaAMC is also involved in discussions to unveil an ETF cross-listing program in Brazil, which coincides with Chinese President Xi Jinping’s visit to Brasília last November.
Amidst these international expansions, domestic challenges persist for Chinese asset managers due to reduced profit margins and increased fee pressures as institutional investment flows become more prominent. The “national teams,” which comprise government-backed investors, have been significant players in the stock market, with ChinaAMC being the leading ETF manager in the nation, holding 650 billion yuan in assets. Li noted that these teams, which invest during market downturns, reflect the government’s long-term confidence in the market.
The intention of China Asset Management Company (ChinaAMC) to enter the U.S. and Brazilian markets comes as part of a broader trend of Chinese fund managers seeking to broaden their global reach and renew interest in Chinese assets. Over the past few years, geopolitical tensions and economic challenges have led to decreased foreign investment in China. By establishing partnerships and launching funds specifically designed for foreign investors, ChinaAMC aims to attract capital from regions that have been historically interested in Chinese markets, despite the risks. The company seeks to capitalize on the anticipated rebound in China’s economy and investor confidence, promoting sustainable investment strategies and expanding accessibility for international investors. Furthermore, partnerships with foreign institutions, such as those in Oman and Qatar, reflect ChinaAMC’s efforts to build a diversified investment portfolio while navigating international regulatory frameworks. The ongoing dialogues with Brazilian authorities also indicate a systematic approach to integrating with global financial markets. Overall, China’s push for internationalization is a pivotal movement in its asset management sector, with ChinaAMC at the forefront of these initiatives, aiming to overcome domestic market challenges while exploring new global opportunities.
In summary, China Asset Management Company is actively pursuing significant international expansion by launching funds in both the United States and Brazil, aiming to attract foreign investors back to Chinese markets. This strategy underscores the firm’s commitment to diversifying its investor base and restoring global confidence in Chinese assets. With strong domestic performance, strategic partnerships, and forthcoming fund launches, ChinaAMC is poised to navigate potential geopolitical challenges as it expands its market presence overseas.
Original Source: money.usnews.com
