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Lujiazui plans global asset platform

February 08,2018

   
   

Lujiazui, the commercial and financial center of Shanghai, plans to set up the Global Asset Management Association of Lujiazui in the first half of this year.

More than 60 global asset-management institutions, including BlackRock, Fidelity International and JPMorgan, attended a preparatory meeting in Lujiazui on Tuesday.

The association aims to establish an exchange platform for global asset-management institutions to help them to set up in Lujiazui and understand China’s asset-management industry.

Yuan Yefeng, director of Lujiazui Financial City Authority’s department for finance, shipping and innovation, said the association would attract more leading asset-management organizations to do business in Shanghai.

Currently, over 60 overseas asset-management institutions have subsidiaries or plan to set up branches in Lujiazui. Nine of the top 10 global asset-management institutions have wholly foreign-owned enterprises in Lujiazui.

By next year, China will have the world’s second-largest asset-management market after the United States, with more than US$17 trillion of assets under management by 2030, up from US$2.8 trillion in 2016, according to Casey Quirk, which advises investment-management businesses.

In September 2016, JPMorgan set up a wholly foreign-owned enterprise in the Shanghai free trade zone with the first asset-management license for a foreign company in China.

The license allows a foreign firm to offer onshore fixed-income, equity and multi-asset private funds to both institutional and high-net worth investors in China.

“There was only one member of staff when the wholly foreign-owned enterprise was founded, but now there are 13. We are growing fast,” said Zhou Lingling, deputy general manager with JPMorgan Asset Management (Shanghai) Ltd.

“We are confident of our performance in China, and we will seize every chance in this market,” said Zhou. She said China is expected to become the largest asset-management market in the next five to 10 years.

“We are so glad to be a member of the coming Global Asset Management Association of Lujiazui. I believe it will be a great exchange platform for financial institutions like us,” Zhou said.

Last July, UBS Asset Management became the first international manager with a Qualified Domestic Limited Partner quota to receive a private fund management license in China.

Given the license, UBS is able to provide a broad range of services to onshore and global investors, and to work more closely with subsidiaries of global firms in China to meet their domestic investment needs.

Gao Ting, head of China strategy at UBS Securities Equity Research, said at the preparatory meeting that with China’s efforts to open up its capital markets, its yuan-denominated A shares will be included in the MSCI indexes in June, making China’s stock market more important for both onshore and offshore investors.

Meanwhile, Chen Ting, general manager with BlackRock Investment Management (Shanghai) Co, also showed her passion for the Chinese market.

“Given the opening-up policies and the pleasant business environment, Lujiazui Financial City in Shanghai will be the first choice for global financial companies to do business in China,” Chen said.

At the World Economic Forum in Davos last month, China reiterated its commitment to opening banking, securities and insurance sectors.

Global investment managers like JPMorgan and Vanguard are eying a share of China’s public fund market as well as China’s pension market, according to Chen. “I hope foreign investment managers like us will be allowed to manage China’s public fund in five to 10 years,” she said.

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