(China Alert) China asset management: The rest of the iceberg

• Assets under third-party management grew 56% in 2015
• Trends indicate growing investment sophistication
• Foreign ownership reforms will make a larger portion of this accessible to global managers

Update: Defining asset management in China can feel like trying to nail jello to the wall. Many products and services do not fall under the traditional remit of asset management, but are considered substitutes by investors and should be analyzed to give a more accurate picture of fund flows on the Mainland. Z-Ben Advisors calculates that an all-inclusive definition of asset management puts the mainland market at RMB75tr (USD11.5tr) as of the end of 2015. Effective targeting of that sum’s varied parts by global managers for investment in their home markets is now more important than ever. A continuing trend towards active management will accelerate throughout this year and Z-Ben Advisors believes ongoing reforms to outbound investment and foreign ownership can move a larger portion of these assets into foreign managers’ hands. Z-Ben Advisors would emphasize that early 2016’s relative quiet should not be mistaken for inactivity.

Beginning with the most targetable sectors, foreign managers in…