CHINA/EUROPE - Foreign players grappling for a share of China's emerging fund management market are unlikely to see profits until 2011 at the earliest because of the substantial costs involved, according to research and consulting firm Cerulli Associates.
Since July 2002 - when the Chinese government permitted foreign fund managers to enter the market through joint ventures with domestic firms - there has been a scramble for a piece of the action with several European fund managers sealing regional partnerships, including UBS Global Asset Management, SG Asset Management, Skandia and Allianz Dresdner Asset Management.
But according to Cerulli, these foreign players will fail to see profits for at least another eight years as the cost of market entry remains high. The research also warns of what it calls the “checkered history” of cross-border ventures, more than half of which are now defunct. But this is unlikely to stem the tide of “breathless announcements” regarding Sino-foreign alliances,” said Cerulli.
Cerulli predicts that China’s nascent fund industry looks set to eclipse other Asian markets by 2030 when it is expected to be worth around US$350bn. Closed-ended funds have been available in China since 1997. Open-ended vehicles, first launched in late 2001, now hold over US$4bn. And China’s total collective scheme industry has surpassed US$10bn in size.
Pension reforms - which have come under fire recently due to delays - are also expected to generate as much as US$1.8trn by the same year, meaning that the industry could even rival Japan, said Cerulli.
The Pensions Regulator (TPR) has granted 11 master trusts extensions to apply for authorisation, as it confirms it has received 22 applications ahead of the 31 March deadline.
Aegon Master Trust, Fidelity Master Trust and Ensign have sent off their authorisation applications to The Pensions Regulator (TPR).
Self-administered pension funds spent £15bn on payments to pensioners in Q4 2018, but received just £12bn in contributions (net of refunds), Office for National Statistics (ONS) data reveals.
Aberdeen Standard Investments (ASI) and Gresham House are to team up to form a joint venture.