The sledgehammer and the scalpel
How China-specific business risks and probabilities were approached by global managers was a key determinant of the latest Z-Ben Rankings results. That was understandably so, as the past year was clearly weighed down by the yoke of uncertainty on multiple fronts. For the vast majority, the choice made was either to defer and delay, or to refocus energies towards servicing a global client base seeking greater exposure to RMB asset classes. A few, however, fully recognized where policy on China’s domestic fund management marketplace was headed; these smartly adapted and, in doing so, improved their competitive positioning.
For the year ahead, all global managers will be faced with the choice of how – or perhaps if – to execute and build an onshore money management business in China. There is now little doubt that Chinese policy is set to allow for fully-controlled retail platforms. It is a move that will also come sooner than nearly all firms are presently planning for. Having said all of this, there is a likelihood that the new rules will prove highly contentious. Obstacles will remain for managers – and potentially not in equal shares. For those that do press ahead, simply porting a global operating standard into a China business will not work. Real adaptability will prove to be the single most important variable for generating lasting success.
Public groundwork on a move to 51% has seen Invesco leapfrog UBS into top spot for the Mainland business. A solitary private fund launch has also oiled the pipes for its accompanying WFOE.
Long-running outbound leader, JP Morgan, maintains its position atop the pile, continuing to lead the way on mutual recognition, whilst also utilizing the bank QDII channel.
This round of the active vs. passive contest goes to the traditionalist, as Fidelity sneaks in ahead of BlackRock to claim the top spot