AMP Capital boosts Asian profile with China venture
On Monday the financial services giant said it would take a 15 per cent founding stake in China Life AMP Asset Management. China Life Insurance Group will hold the rest.
The move is an attempt to exploit rapid growth in China's wealth management sector, and a recent rule change that allows China's insurance companies to offer funds management.
The business would aim to sell domestic equities and fixed-income products to retail and institutional customers in China, AMP said.
The company cited private-sector forecasts that assets under management in China's mutual fund industry would reach $800 billion this year and almost $1.5 trillion by 2017.
AMP already has a presence in Japan and China, and chief executive Craig Dunn said the Chinese market was central to its strategy.
"A funds management joint venture in China is a strategically significant move for AMP, giving us direct access to the world's second-largest and fastest-growing major economy," he said.
Several large Australian financial services firms are eyeing the growth potential of Asia's rising middle classes.
Big banks with minority stakes in financial services businesses in Asia include Commonwealth Bank, which has stakes in banks in China and Vietnam, and ANZ, said to be considering selling its stake in Indonesian lender Panin Bank.
Insurance Australia Group also plans to obtain 10 per cent of its gross written premiums from Asia by 2016, after expanding in Thailand, Malaysia, India, China and Vietnam.
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AMP said it will take a 15% founding stake in a funds management joint venture called China Life AMP Asset Management, with China Life Insurance Group holding the remaining stake.
AMP is aiming to tap rapid growth in China’s wealth management sector and to take advantage of a recent rule change that allows Chinese insurance companies to offer funds management. AMP’s CEO Craig Dunn described the move as giving the company direct access to China’s large and fast-growing economy.
According to AMP, the business would aim to sell domestic equities and fixed‑income products to both retail and institutional customers in China.
The article cites private‑sector forecasts that assets under management in China’s mutual fund industry would reach about $800 billion this year and almost $1.5 trillion by 2017.
AMP already has a presence in Japan and China, and the company says the Chinese market is central to its strategy. The joint venture is described as a strategically significant move to expand AMP’s footprint in Asia.
The article notes several big Australian firms targeting Asia: Commonwealth Bank has stakes in banks in China and Vietnam; ANZ has been reported to be considering selling its stake in Indonesian lender Panin Bank; and Insurance Australia Group plans to get 10% of its gross written premiums from Asia by 2016 after expanding in Thailand, Malaysia, India, China and Vietnam.
The recent rule change allows Chinese insurance companies to offer funds management, which opens the door for joint ventures like China Life AMP Asset Management to market funds in China and for more competition and product offerings from insurers in the domestic market.
For everyday investors, AMP’s launch of a China funds management joint venture signals that major Australian financial firms are actively pursuing growth opportunities in Asia’s expanding wealth markets. It highlights the industry trend of building on China’s rapid mutual fund growth and regulatory changes that broaden product availability.
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