China has long been recognized as the biggest single opportunity for new business and growth in the asset management industry – and COVID-19 hasn’t changed that:
Beyond a world dominated by COVID-19-related restrictions on economic activity, KPMG professionals anticipate opportunities for fund managers to either expand their existing footprint or enter China for the first time.
KPMG Professionals see a reshaping of industry contours driven by several mega-trends over the medium term, i.e. within 5 years:
For industry executives, the option of full ownership of retail fund management companies in mainland China offers a new, welcome but complex avenue to future growth and success. As it stands, foreign players have a number of ways to access the mainland China market, including, but not limited to, QDLP (Qualified Domestic Limited Partnership) programs, joint ventures, wholly foreign-owned enterprises and fully-owned fund management companies.
Whatever the strategy may be, it is clear a considerable amount of investment is needed for entering the market, meeting local regulations and guidelines, setting up infrastructure, building up brand recognition, hiring the right talent and adapting to the local culture. But given the potential size of the reward, all serious competitors are looking long and hard at what it might take to grab the prize in China.
Sitting in an asset management C-suite looking out to the landscape in 2025, there are a number of questions to consider when thinking about China: