Asset managers boost portfolio in China
GLOBAL asset management companies are expanding their investment portfolios in China, boosted by their growing confidence in Chinese assets.
China’s industrial upgrading and ramped-up policy support remain the major attractions for overseas investors, Hu Qimu, a deputy secretarygeneral of the digital-real economies integration Forum 50, told the Global Times on Monday.
Brookfield (Shanghai) Private Funds Management Co. completed its filing with the Asset Management Association of China (AMAC) on March 8 with registered capital of 100 million yuan ($13.92 million). The company is a wholly foreign-owned private equity and venture capital fund manager.
Brookfield is one of the world’s largest alternative asset managers in real estate, infrastructure, renewables and private equity. The company has been investing in China since 2014, with $15 billion of assets under management, and it expects to continue its prudent investment activity in China over the coming years, the company said on its Chinese website.
Despite recent market volatility, “we take a different view for two reasons: we believe Chinese policy actions will soon bear fruit and that pessimists do not fully appreciate China’s crucial role in both the global economy and corporate supply chains,” read an article released by Brookfield Oaktree Wealth Solutions in December 2023.
On March 8, KKR Investment Management (Shanghai) Co. completed its filing, with registered capital of 10 million yuan.
KKR Investment Management (Shanghai) Co., AllianceBernstein Fund Management Co. and Amundi Fintech (Shanghai) Co. on February 26 held a joint opening ceremony, according to a post by the Shanghai government.
KKR has been diversifying investment in China targeting consumer-driven sectors, instead of its previous singular focus on technology, CNBC reported in July 2023.
“We have around $6 billion invested in China. Our core focus has really been around the sweet spot of what we think the market opportunity is — domestic consumption,” KKR’s co-Chief Executive Officer Joseph Bae was quoted as saying in the CNBC report.
As of the end of January this year, there were 145 fund management companies in China, of which 49 were foreign-invested fund companies, including equity ventures jointly established by Chinese and overseas companies along with wholly foreign-owned ones, data from the AMAC showed.
China will intensify efforts to attract foreign investment, according to this year’s Government Work Report, approved by the second session of the 14th National People’s Congress on Monday, with a slew of measures from shortening the negative list for foreign investment to expanding the Catalog of Encouraged Industries for Foreign Investment to strengthening services for foreign investors.
The United States has been implementing some long-arm jurisdiction practices or suppression to force international investors to leave China, which is contrary to market principles and may only show an effect in the short term, Hu said, adding that these measures will only fail in the long run as enterprises are already facing difficulties operating in the US, such as high labor costs.
Hu noted that China has been upgrading its industry while stepping up policy support in a bid to promote opening up and attract more foreign investment despite the current situation.
China’s A-share market has enjoyed a sustained rebound recently, with multiple overseas financial institutions voicing intentions to boost their holdings. “Global funds are returning to China stocks,” Bloomberg reported earlier, citing Morgan Stanley analysts.
In January, 4,588 new foreigninvested enterprises were set up nationwide, a year-on-year increase of 74.4 percent, according to data from the Ministry of Commerce in February.