Fidelity International plans to launch a number of investment trusts across various asset classes in mainland China to tap into the world’s second-largest wealth management market, expected to grow to US$40 trillion by 2030 is.
“China’s mutual fund market is growing rapidly and presents a huge opportunity for us,” Rajeev Mittal, managing director, Asia Pacific (excluding Japan), said in an exclusive interview with The Post. Told.
“We have grown our team and built our investment platform in China in recent years. This is one of our major strategic initiatives.”
The company entered mainland China in 2004 and set up representative offices in major cities. Last December, the company became one of the first groups of foreign funds to be allowed to enter the country’s retail market without a local partner.
![Rajeev Mittal, managing director for Asia-Pacific ex-Japan at Fidelity International. Photo: Xiaomei Chen](https://cdn.i-scmp.com/sites/default/files/d8/images/canvas/2023/11/24/d17688d5-68ea-480b-8ad9-89c7b706aac6_1126e908.jpg)
Since establishing FIL Fund Management (China), it has launched two investment trusts this year, raising a total of 6.08 billion yuan (US$862 million). An institutional bond fund raised 5 billion yuan on Nov. 21, and its first equity-focused mutual fund raised 1.08 billion yuan from about 27,000 retail investors in April. .
The firm plans to launch several more funds in China next year, investing in different asset classes. These include equity and multi-asset funds, as well as another bond fund awaiting regulatory approval, Mittal said.
These funds will be invested in mainland assets, but Fidelity hopes to introduce some of its global products at some stage and, subject to regulatory approval, also develop pension products for China, Mittal said. he added.
The London-headquartered investment management firm is seeing business boom in the post-COVID-19 era. As of September, the company had $714.3 billion in assets under management, an increase of 22.7% compared to 2019, before the pandemic began.
Fidelity is working with peers including Allianz Global Investors, Amundi, Schroders and BNP Paribas to expand its business in China. In China, demand for asset management is increasing due to the increase in household assets and the opening up of the country’s pension system.
According to a recent report from McKinsey & Company, the size of China’s asset management industry will more than double from 130 trillion yuan in 2022 to 280 trillion yuan by 2030.
With the country’s rapidly aging population, the government will begin expanding private pension plans in April 2022, and banks, foundations and insurance companies will continue to roll out new products to capture greater market share. I put it in.
Fidelity eyes series of product launches in China after stock debut this quarter
Fidelity eyes series of product launches in China after stock debut this quarter
“Fidelity has very strong DNA in the US, UK and Hong Kong pension markets,” Mittal said. “We are excited to bring that capability to mainland China.”
Fidelity is one of the largest managers of Mandatory Provident Fund, Hong Kong’s compulsory retirement scheme, with a market share of 4.3 per cent in terms of assets under management and a choice of 24 funds for investors. I am.
In Asia, Hong Kong has played an important role as a regional hub for Fidelity since 1981. Hong Kong is also the world’s second largest investment hub after London for equities, fixed income, multi-asset and sustainable investing.
“Hong Kong is and will continue to be an international financial center. With the Greater Bay Area initiative, Hong Kong will play a greater role,” Mittal said.
The Greater Bay Area is the Chinese government’s ambition to integrate nine mainland Chinese cities – Hong Kong, Macau and southern Guangdong province – and turn them into an economic powerhouse.
Fidelity has been active in distributing mutual funds through various partners through its Wealth Management Connect scheme, making cross-border fund products available to Bay Area residents starting in September 2021. became.
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Mittal said fund sales through the scheme have been slow, which is not surprising considering it has been less than a year since borders reopened.
“With a population of more than 85 million people and a GDP of $1.9 trillion, we believe the Greater Bay Area offers significant growth opportunities for Hong Kong in the future.”
Fidelity also operates in other Asian markets such as Australia, Japan, South Korea, Singapore and Taiwan.
“In Asia, we are also expanding into the ASEAN market through our Singapore office,” Mittal said. “This year, we partnered with Thailand’s third largest bank as a product and service partner.”