China's Asset Management Industry Set To Overtake UK In AUM By 2019

In the whitepaper Leadership in Times of Plenty: Future Winners in China's Asset Management Industry, it is forecast China's assets under management (AUM) could overtake the UK's $3.8trn AUM as early as 2019, according to Bloomberg.

Furthermore, the report said China's share of the industry would rise to 10%, up from 4%, the same level as where the US was in 1990.

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In addition, asset growth would remain at around 15% a year until 2025 and then fall slightly to 12% per year between 2025 and 2030, which will result in $8.5trn new assets in the country.

However, the report said domestic firms would be the winners from this growth, with asset management firms such as BlackRock and Fidelity International, who have been trying to tap into the country's growth set to only gain 6% of the total share.

The report said: "China is the only large, multi-trillion dollar market that has seen net new flows in excess of 30% per year.

"The pronounced Chinese bias for domestic asset classes favour local firms" whose "sustained market presence, entrenched distributor relationships and extensive brand-building efforts all add up to a clear advantage, which foreign firms will have trouble replicating," the report said as quoted by Bloomberg.

Elsewhere, the whitepaper highlighted the growth would be driven by high net-worth individuals along with pension and insurance money.

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"Perhaps to make up for a late start, China's asset managers have blossomed and evolved in a manic and seemingly haphazard fashion," the report said.

"A cacophonous universe of mutual funds, trusts, pension funds, private funds, vaguely defined ‘wealth management products' and mobile-only money market funds try to out-do each other, or at least copy the latest hot sellers."