(China Alert) Competition to enter set to explode

  • FMC
– With 123 FMCs currently, there may be over 150 on the Mainland by 2020. – There is a bottleneck in approvals with many new FMC applications in the pipeline. Update: Last week, State Council committed to allowing majority-foreign-owned FMCs in China, with some as early as within the next 12 months. This week, we look at […]
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(China Alert) Navigating a billion $$$ unknown

  • FMC
-Z-Ben Advisors believes that foreign managers should expect large and, in some cases, recurring capital calls -This is a result of greater regulatory pressure on shadow banking -Risk management should be the focus of both regulators and FMC stakeholders Update: Z-Ben Advisors believes that FMC subsidiaries are on the verge of a major readjustment as […]
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(China Alert) CSRC pumps the brakes on FMC subs

  • CSRC, FMC
-CSRC is working on draft rules to tame FMC subsidiary growth -A limited grace period has been incorporated into the draft -We believe the final rules will be enforced shortly Update: CSRC’s FMC subsidiary draft rules have been reported. The regulator appears to be making a concerted move to tame loan and channel business being […]
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(China Alert) FMC profitability: Institutional demand boosts margins

  • FMC, mutual fund sector
-Strong institutional flows drive mutual fund profit growth -Product strategy is shifting to cater to this demand -Sticky AUM should lead to more stable dividend payments for foreign partners Update: The release of China’s mutual fund industry annual results paints a bright picture. Based on Z-Ben Advisors’ calculations, profit margins averaged 28.9% in 2015, up […]
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(China Alert) FMC segregated accounts: Unprecedented visibility

  • FMC, Segregated Accounts
·Z-Ben Advisors’ first-ever breakdown of FMC SA trends ·Our analysis indicates a broad product and investor range ·This segment is a superb proxy for insti/HNWI demand Update: Z-Ben Advisors has gained unprecedented access to data on mainland FMC segregated accounts (SAs). We have broken down this newly-visible SA picture to shed much-needed light on investment […]
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(China Alert) FMC non-core business: The other side of the coin

  • FMC, JV
·FMC non-core business makes up RMB10.2tr of China’s MF industry ·FMC subsidiary and parent SA business is opaque and largely misunderstood ·Foreign firms (particularly JV partners) need to understand this space Update: The majority of the almost RMB17tr (USD2.7tr) Chinese fund management industry remains veiled and misunderstood. Fund management company (FMC) non-core (i.e. not public […]
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(China Alert) QDII and MRF: Out with old, in with the new

  • FMC, JV, MRF, QDII
·Two joint venture FMCs killed off QDII funds last week. ·They died for reasons that have little to do with QDII’s overall health. ·The liquidations reinforce how MRF timing and fund choice will be critical at this juncture. Update: Two JV FMCs – Manulife Teda and Fortune SG – each liquidated a QDII fund last week, an industry first. Z-Ben […]
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