安永（EY）：中国资产管理报告2022 China Asset Management Report 2022

2022OverviewOverviewStrongtop-linegrowthna(AMAC)stoodatRMB68trillion,orUS$10.79trillion,attheendofByourestimatesChinanowistheworld’sfourthlargestassetxembourgandIrelandItisalsoundFMorRMB100trillion,orUS$16trillion.strysAUMhasgrownbythefastesttefundsaswellasthecapitalappreciationofequity-centricproducts.MutualfundproductsclaimthelionsshareoftheindustryAtRMB25.3trillion,thesectoraccountsfor37.2%oftheindustry’stotalAUMandressivethantheAUMgrowthisthegrowthofthemanagementfeeCstoodatRMBbillioninandAGRfromtheRMB30.2billionin2010.oughagrowinglistingsecuritiesfirmsprivatefundmanagersandnceassetmanagersnowoffermutualfundproductstoomanagementthroughmutualfundproducts,privatefundsaremainlyhighnetworthindividualinvestorsandoccasionallyinstitutions.PFMcollectivelyreportedatotalAUMofRMB19.8trillionupontheendof1andwerethesecondlargestpillaroftheonshoresubsectorofprivatefunds,withayear-endAUMofRMB12.8trillion.Itisivatesecuritiesfundswhichmostlyinvestinthesecondarymarket.ReportReportingcoreseenstronggrowth,othersectorsoftheindustryhavebeenstagnating,ifnotshrinking.ThemostflagrantareallyintendedforWIandinstitutionalizedinvestmentsolutionsthispartoftheindustry,atRMB15trillionupontheivateloanstorealestateonoftheNewAssetclineofFinancialInstitutions”,wasjointlyissuedreignExchangetointroducebetteraccountabilitytotherapidlygrowingbusinessofprivatefunds,trustproducts,bankinganttothesubjectofthispiecebelow•Prohibitiontoguaranteepositivereturnsorwealthmanagementproductsandtrustproductsofreturnoratleastprincipalsafety,eithertoitandinsteadaskeddistributorstoinformthebuyersofinvestmentproductsoftherisks,ingsalessuitabilityrequiredtodisclose•Assetsegregationandasset-liabilitymatching.Productmanufacturerscannolongerrunoftheproductstheyofferarematchedwithngassetsproductsareprohibitedfrominvestinginothertypesoffinancialinvestmentproducts,exceptstipulationonthemaxleverageratiothatcanbeappliedbydifferenttypesofproducts.•Clarificationofjurisdiction.Typesofinstitutionsdefined.677|Howncnswetmakesaingfrethefturefeellikeagoodinvestmentnow?4.73.6nstitutionsnallysetupastheincorporatedinvestmentdepartmentofthelargestinsurers,agrowinginvestmentmanagementcapabilitiesCurrentlymostmoneySomeareaimingforretailbusinessbypreparingtoobtainmutualfundhavebutcontentwithjustprovidingthelegalvehicleandstedinactuallymanagingthemoneyasforcedtrustindustrytoseeknewgrowthenginesandagrowingnumberofthemhavepickedassetmanagementasthenewpivot.Trustcompanieswillfacestiffcompetition,buttheirambidexterityinproductmanufacturinganddistributionbodeswellforthosethatcanmusterbothresolvesandresources.AndlastlyWMCarethelatesttomakeinroadstotheassetmanagementbusiness,andperhapsthemostmenacingtotheincumbentplayers.Originallysetupasspecial-purposevehiclestoaccommodatethewealthmanagementproductsspunofffrombanks,thesemanagershavegoneundertransformationtoassertamoreactiveroleinChina’swealthandassetmanagementbusiness.Theyareendowedwithdistributionaccessandalargebalancesheet.Inthefirstyearoftheiroperations,theyhavemanagedtodeliverstrongresults,despitehavingtocopewiththechallengesthattypicallyfacedanewindustry.AsWMCmature,theyhavestrongincentivetobuildouttheirassetmanagementcapabilitiestoo.Third-partyassetsmanagedbyinsuranceAMC(CNYTr;2017-2021)77.520172018201920202021ReportWhattoexpect?notchangeaccelerate,thoughintheimmediatefuturemutualfundsandprivateeedsometimetoregroupafteryearsofneckbreakinggrowth.rcesbehindtheprojectedgrowthFirstlythoughstillnasassetmanagementindustrywithaunifiedregulatoryframework.Thenewruleslevelledtheplaygroundfordifferenttypesofstmentandlongtermfinancialplanningeasier,thusbolsteringthelong-terminflow.ofitsopenendfundsoflongerthanfiveyearsandanaccumulativereturnonofmorethanShouldtherebeadownturninthestockmarket,thefundindustrystillhasattractiveproductstoofferitscustomers.stabilizeroftheindustrythesteadycashflowtheybringinalsoallowcanbeexpectedtopaybackinvestoreducationscriticalinitiativesthatpavewayforsustainablegrowth.nanewyoungergenerationofinvestorsComparedwiththeirparents,whoarethecurrentcoreongerwingincomeThefundflowsgeneratedfromthisdemographicprovidestheindustrywithadditionalgrowthfuel.sophisticationoftheincumbentonesmeansthatwillbefeltthemostinthreeareas:advice,digitaltmentsularadvisoryestoreducationproductcomparisonandselectionndanalytics,andregularportfoliomonitoring.Comparedsuchservicesgreatlyimprovedthecustomercesfromoutsideoftheassetmanagementindustrythough,nTechstartupsoraffiliatesoflargetechnologyfirms),butthereareregearinguptoincludeadviceintheirpropositionstoo.stimpossiblenowervicedeliverymodelinChinawithoutgoingfullydigital.Thismigrationofthecustomerjourneyisacceleratingalongwiththearrivaloftheabovementioneddigital/mobilenativeinvestors.Theirexpectationtomonitorandmanagetheirinvestmentsona24/7basis,alongwithotherdemandsincludingmanagersanddistributorstorethinktheirdigitalrepresentation.rketsinAsiaPacifichcurrentlythefocusismoreontheenvironmentpillar.recentlyannouncedcarbonneutralityambition,andpartlyfueledbytherevaluationofrelatedassetsinthelocalmarketandtheconsequenttradingopportunities.gblesustainableinvestmentproductstocarefulnottogreenwashthecurrentpracticeandstartthinkingaboutthebroadertransformationneededtoeruponinvestorsexpectations4923212499133,2929,175124,1177,4036,0915,1354,69281,73974,64296,8524923212499133,2929,175124,1177,4036,0915,1354,69281,73974,64296,852IntensifyingcompetitionheindustryattractnewentrantsFMCplatform,attractsthemost.AstheindustrybecomesstributioncostsAmorecongestedindustryalsomakesitmoredifficultformanagerstostandout,aparticularchallengefornewandsmallerfirms.Thediversebackgroundofnewentrantsalsoputmorecompetitivepressureontheincumbentplayers.WhilehistoricallyFMCaresponsoredbyaconsortiumofstrategicinvestors(securitiesfirms,trustcompanies,banks)andfinancialones(varioustypesofholdingcompanies,largestate-ownedenterpriseswithexcesscash),mostofthenewFMCaresetupbyanewforce:foreignassetmanagers,individualstarportfoliomanagers,andoccasionallythespun-offinvestmentdepartmentofsecuritiesfirmsandinsuranceintrudersaremorelikelytotrynewdisruption,ifnotthreat,totheexistingplayers.Privatefundindustrywillalsoattractmoreentrants,mutualfundindustry,privatefundswillremainamorewandsmallmanagersThisisalsothereasonwhyitwillcontinuetoattractindividualstarportfoliomanagersofthemutualfundbusinessviaPFMfirstAttheperipheryoftheassetmanagementindustry,trustcompanies,insuranceAMCs,andWMCswillalsocontinuetofightforthird-partyassetsintheirownway,whileseekingthenecessarylicensesthatwillrecognizetheirlegitimacy.(2017-2021)5,01399020172018201920202021(2017-2021)252323239999920172018201920202021InsuanceAMCWMCFMC(2017-2021)2017-2021104,22587,83079,77771,110666,4182018201920172018201920172020MutualFundPrivateFundWhattodo?Productinnovationfthecorebusinessmanagersshouldcontinueinvestingintheirproducts.WhiletheindustrynowcertainlyashortageofproductsitdoessufferfromalackofityAsthecompetitionintensifiesmanagersshouldusenasadifferentiatorinsomuchasavaluelevertoservetryprobablydoesnotneedanothervanillabondfundorequityfund,wedohaveidentifiedtwotypesofproductsstillinshortsupplyThefirstisproductsthataggregatesthemanager’sstrategies:multi-asset,multi-income,andmulti-strategyproducts.TheuchproductsreofChineseinvestorsportfolioTheotherproductinnovationtrendistakingtheoppositeapproachercanmodularizetheirproductssothatinvestorscanconfiguretheirownportfolio.Managerswiththelargestintbutwebelieveitisthesmallerfirmsthatarebetterpositionedtocapturethellowsthemtofocusonanichethatrequiressimplicitymorethananythingelse.Amodularizedderlyingapproachalsoallowsthemanagertolywiththeotherplayersonthefinancialservicesvaluechainwhichitselfisquicklybecomingmodularized0.66.010.8Riseofalternativeassetsalternativesideoftheindustrytogrowfaster.Thiserencesnewruleswhilecuttingdownthepassthroughgiverisetoabetteriveassetmanagementindustry.Sincetheintroductionofthendinstitutionalinvestorsbuyingnotless,butmoreprivateincreaseoftheseassets’valuationinturnfurtherboostedthedemand.Inadditiontotheattractivereturns,thelowcorrelationbetweenalternativeassetscurrentportfolio.Andlastly,privateassetsareusuallysandinvestorstopursueAllthesemadebuildingandgrowinganalternativeassetmanagementbusinessbothacommercialimperativeandaregulatorynecessityformostassetmanagersinChina.PFMhistoricallyareandwilllikelycontinuetobethelargestmanagerofalternativeassets.TheinsurersandinsuranceAMC,asthemajorinstitutionalinvestorsinChina,havescrambledtoacquirealternativeinvestmentmanagementcapabilities,especiallyinrealestateandprivateequitiesspace,inresponsetoaccountingruleschangesandanewrisk-basedcapitalscheme.EvenFMC,whoaretraditionallyassociatedonlywithpublicstocksandbonds,arealsoofferingalternativeassetmanagementtoretailinvestorsintheformofmutualfunds.PE/VCprivatefundsAUM(CNYTn,2017-2021)2017-202120172018201920202021VentureCapitalFundPrivateEquityFundDistributionDistributionibutionchannelThetraditionalvaluechainwheredistributorsusuallybanksgementcompanieseresponsibleforproductmanufacturingisgivingwaytoamoreconvolutedmodel,asdistributors,whethertheyarebanksadvisorsortechnologyfirmscreepintoproductgAssetmanagersontheotherhandhaveyettomatchwiththesamelevelofinitiativeandsteadfastness.rscanupgradethedistributionoftheirproductswiththreeinitiatives.Thefirstistodiversifywithinistributionchannelforassetmanagementproductsremainthirdorfourthnationalbankingpartnerwillpayoffbetterbyecondistofosterbetterrelationshipswithtechnologycompanies.thelongertermalignmentismuchlesscertainthetechnologyfirmswillbecontentplayingapartnerroleratherzethewholevaluechainintheforeseeablefutureWorkingwithtechnologycompanies’distributionagentsthsellinglowriskproductsandsomeareonlygoodatsellingequityproducts.AndthelastdistributioninitiativeistoworkmorecloselyionalbankssecuritiesnthebiggestsecuritiescompanyesfirmsclientsareusuallymoresophisticateddmorelikelytobuyequitycentricproductsThisisinstarkcontrastwithbankingcustomers’fixationonfixed-incomeflexibleaboutthesizeofthemanagerstheyworkwith.Privateththeirprimebrokers,butsecuritiescompanies’distributionbytheunityProductanddistributionaside,thebiggestbottleneckustryisitshumanresourcesIndustryhasfeltthepainofportfoliomanagershortage,butthesbeyondthatGoodinvestmentanalyststfoliomanagersarealsoalwaysdifficulttodatedbytherapidgrowthoftionalbusinessAllthisiscompoundedbytheestablishedmanagersthetargetforpoaching.InadditiontotheincrementalapproachofcontinuousostartinvestinginntothetalentproblemAmorerigorousprocessyieldslong-lastingbenefitsofindependencefromstarrtfoliomanagersWhencombinedwithtechnologylevelofautomationandingcostandoperationalrisksfromhumanomisingcodifiedmorequicklytoo.withtheindustryleadersandnewentrantsbutshouldthesizeAndwhenstatedbecompanytostipulateamorestringentinvestmentormancereviewsmanagersinrdstheirtechnologyinfrastructure,usuallydependingonandiftheyareinretailorinstitutionalbusiness.Ontheretailside,butincreasinglystruggleswithpracticallyallkindsoforderfundtodelivertheoperationsneededforaninstitutionalurehstoneofthenextgenerationsystemsOrAcrosstheresilienttechnologyinfrastructuretomeettherisingrsebaseofpartnersalongtheibilitiesmoreopenmindedlythenextgenerationtechnologiesanewrelationshipwithetechnologyexpenditurehichweestimatetobeofMeportthestrategiesbebothastuteandresourcefulrequirethemnotonlytodowhattheyaregoodtotrynewwaysofegulatoryewholeindustryinWhilethefullimplicationscanonlybefeltinthelongtermimmediateactionsareneededtoenceofthewindowmakestherequiredinitiativesallthemorecritical.Seekcorporatedevelopmentopportunitiessquicklygivingwaytoastecosystemietheoneslistedinthebeginningofthisarticleshouldbepreparedtointeractwithmoreentitiesinthemarket,andtoformmultiple,ifnotconflictedrelationshipswiththesamecounterparts.Forexample,theywillcompetewiththeirbiggestinstitutionalclientsandtheirbiggestdistributionpartnersforAUMwhilekeepingthecompetitivetensionfromspoilingthethisparadigmshiftwithindifferenceandevenrenunciation,guethatproactivecorporatedevelopmentactionsshouldediateoptionsistosetupdedicatedplatformsasriesthatofferfinancialplanningfirmsandtrustcompaniesdoingsooutofasubsidiarywillveschemesensuresthelong-termflexibilityoftheorganization.Theseonalagersandallproductbereceptivetowardsteamingupnedfinancialholdingcompaniesar