Amundi’s China wealth JV garners $11 billion in 15 months since launch By Reuters
©Reuters. FILE PHOTO: The Amundi company logo is seen at its headquarters in Paris, France October 7, 2015. REUTERS/Philippe Wojazer
By Selena Li
HONG KONG (Reuters) – Europe’s largest wealth manager Amundi has raised more than $11 billion in assets from Chinese investors since becoming the country’s first foreign-controlled joint venture (JV) 15 months ago.
Huihua Wealth Management, which is 55% owned by Amundi and the remainder owned by a unit of the Bank of China, the country’s fourth-largest lender, was established in September 2020 as Beijing opened up its booming wealth management market to foreign companies. All of Huihua’s products are distributed by the Bank of China.
The strong performance of Amundi’s company comes as do global giants like BlackRock (NYSE:), Schroeder (LON:) and UBS have moved to form similar mergers of majority-owned assets since Beijing first allowed it in 2019.
“At the household level, less than 20% of wealth has been invested in financial assets, meaning there could still be a large shift in wealth from deposits and new-earned income to financial assets, wealth management and funds,” said Zhong Xiaofeng, chairman of Amundis Greater China, Reuters said in an interview on Thursday.
Chinese banks dominate the distribution of own and foreign wealth products in the country.
BlackRock’s majority-owned wealth joint venture with China Construction Bank (OTC:) was established in May last year with the launch of two wealth management products primarily serving the Chinese bank’s retail banking clients.
Amundi’s and BlackRock’s ventures are the only foreign-controlled wealth platforms in operation.
With fees tight, wealth managers in developed markets are looking to grow and seek to expand into client-facing asset segments.
They see tremendous opportunity in China, where the local $4.4 trillion wealth management market grew nearly 8% in the first nine months of 2021.
The majority of Amundi’s offerings to wealth JVs include strategies that aim to generate returns in excess of fixed income investments. A small percentage of wealth is in stocks.
Globally, Amundi managed €1.81 trillion ($2.05 trillion) as of last September.
Huihua’s assets of 70 billion yuan ($11 billion) spread across more than 100 products at the end of last year.
Despite the strong performance on the project with the Bank of China, not everything went smoothly for Amundi in the country.
Amundi’s fund joint venture with Agricultural Bank of China (OTC:), in which Amundi owns 33%, reported outflows of €17.3 billion in the first nine months of 2021, according to the company the Chinese bank withdrew assets from its own fund subsidiary.
Zhong said the withdrawals were due to China’s regulatory overhaul of the fund management industry between 2018 and 2021.
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