Selena Li

HONG KONG, (Reuters) – Europe’s biggest asset manager Amundi has gathered more than $11 Billion in assets from Chinese investors. It was the first foreign-controlled joint-venture (JV), to start operations in China 15 months ago.

Huihua Wealth Management is 55% Amundi’s and the remainder by Bank of China. It was established in September 2020, when Beijing opened its wealth management market to foreign companies. Bank of China distributes all Huihua products.

Amundi’s venture is performing as well as BlackRock (NYSE) Schroders UBS and (LON:) have made similar tie-ups with majority-owned wealth since Beijing allowed it in 2019.

According to Zhong Xiaofeng of Amundi, the chairman of Greater China, “On a household basis, less than 20% was invested in financial assets.” This means that there is still a significant shift from wealth created by deposit or newly earned income to financial assets and wealth management and funds.

China’s banks are the most prominent distributors of third-party and proprietary wealth products within the country.

BlackRock and China Construction Bank launched their majority-owned joint venture in wealth (OTC) last May. It included the launch of two wealth management tools primarily for private clients of Chinese banks.

BlackRock and Amundi are the only wealth platforms for foreign-majority countries that are currently operational.

Faced with a tightening fee structure, asset managers in developing markets have begun to look for growth in order to offset the squeeze.

These experts see great opportunity in China. The country’s wealth management market is worth $4.4 trillion and has seen an almost 8 percent increase in nine months.

Amundi offers wealth JVs that are geared towards strategies that generate higher returns than fixed income. The assets include equities, but only a few.

As of September last year, Amundi managed 1.81 trillion euro ($2.05 trillion).

Huihua’s assets of 70 billion Yuan (or $11 billion) were distributed across over 100 products by the end of 2013.

Amundi’s performance with Bank of China was impressive, but it wasn’t all easy for them.

Amundi, 33% owner of the fund joint venture Amundi has with Agricultural Bank of China, (OTC) reported 16.3 Billion Euros of outflows during the first nine months of 2020, the company said. This was due to assets being withdrawn from the Chinese fund subsidiary.

Zhong claimed that redemptions occurred due to China’s reform of the fund management sector between 2018 and 2021.

($1 = 0.8828 euros)

($1 = 6.3402 renminbi)