China Asset Management Company plans to launch funds in the U.S. and Brazil this year, targeting foreign investors. CEO Li Yimei expressed confidence in attracting American retail investors despite geopolitical tensions. The firm is also awaiting approval for an ETF in Brazil, marking the first such launches in these markets, as it seeks to expand its global reach amid growing challenges at home.
China Asset Management Company, the second-largest fund manager in China, is planning to launch funds in both the United States and Brazil within the year. As stated by CEO Li Yimei, the company aims to tap into a resurgence of foreign investor interest in Chinese markets. The state-owned fund manager oversees approximately $350 billion in assets and is pursuing a partnership in the U.S. to create funds for American retail investors despite ongoing geopolitical tensions between the two nations.
Li emphasized that the planned fund launches would mark a significant milestone as they represent the first of their kind in the respective foreign markets. The company is currently awaiting approval from the Chinese authorities to issue a cross-listing exchange-traded fund (ETF) in Brazil. When addressing the company’s strategy, Li stated, “If the mountain will not come to us, then we will go to the mountain.”
This initiative reflects the broader trend among Chinese fund managers striving to broaden their investor base, particularly in light of reduced global participation resulting from concerns over China’s economic slowdown. Li expressed confidence that as Beijing implements necessary economic stimulus measures, foreign investors will be re-attracted to Chinese assets.
Despite skepticism from some U.S. investors regarding products originating from China, Li remains optimistic, noting that there exists a segment of investors willing to engage with Chinese fund managers. Last year, a significant number of international investors and domestic institutions turned to ChinaAMC’s Hong Kong division, leading to a doubling of its assets under management.
In addition to targeting North American investors facing stringent regulations, Li highlighted efforts to attract capital from regions such as the Middle East, Latin America, and Southeast Asia. A notable development was last year’s acquisition of a 10% stake in ChinaAMC by Qatar’s sovereign wealth fund, marking a first in establishing a Middle Eastern stake in a Chinese asset manager.
Looking ahead, ChinaAMC has initiated a partnership with Oman-based Jabal Asset Management, which resulted in the launch of a China equity fund in Oman— a novel offering managed by a Chinese firm in that region. Furthermore, negotiations are ongoing between Beijing and Brazilian authorities regarding a cross-listing program for ETFs, which would facilitate ChinaAMC’s entry into the Brazilian market following President Xi Jinping’s visit to the country.
Domestically, however, Chinese asset managers face challenges such as diminished profit margins due to increasing fee pressures amid a shift towards institutional flows. Government-backed “national teams” continue to invest significantly in the stock market, with ChinaAMC being the leading manager in ETFs with assets totaling 650 billion yuan, benefiting from inflows generated by these interventions.
China Asset Management Company, as one of the largest fund managers in China, seeks to expand its investments globally to mitigate risks associated with declining local investor engagement. In light of recent geopolitical tensions and economic uncertainties in China, the firm’s expansion plan into the U.S. and Brazil reflects a strategic effort to rejuvenate foreign investor interest and stabilize asset inflows. This initiative is part of a broader trend among Chinese asset managers focusing on increasing their market presence in international arenas while navigating domestic challenges. A growing concern among investors regarding China’s economic outlook has resulted in a cautious approach towards investments in Chinese assets. However, signs of recovery and government-backed strategies aimed at boosting market sentiment may create new opportunities for foreign capital to re-enter the Chinese market.
In conclusion, China Asset Management Company is strategically positioning itself for growth in foreign markets, specifically the U.S. and Brazil, amidst ongoing geopolitical tensions and economic challenges. CEO Li Yimei’s optimistic outlook on foreign investment returning to Chinese assets, coupled with significant domestic and international partnerships, illustrates a proactive approach to enhancing its global footprint. Ultimately, these initiatives signify a determined effort to capture a broader investor base while addressing the pressures faced within the domestic market.
Original Source: money.usnews.com
