Who: The German insurer’s main asset management arm, Allianz Global Investors (AllianzGI), which has 578 billion euros ($574.5 billion) in assets under management
What: Holding discussions with Industrial Bank and China CITIC Bank on setting up a majority-owned asset management venture. The two banks’ wealth management units had 1.8 trillion yuan ($263.20 billion) and 1.4 trillion yuan worth of assets, respectively, as of end-2021. AllianzGI has hired Mckinsey & Company for feasibility studies for this project. AllianzGI in recent months began hiring operational staff in preparation for setting up the wholly owned fund management unit.
Where: In China.
When: Over the past few months.
Why:
- World’s second-largest economy has a $4.3 trillion market for wealth products and China’s fund management market is worth $3.7 trillion.
- Western asset managers are no matter what still betting on the long-term growth prospects of China’s financial sector.
- After China in 2019 allowed foreign companies to set up majority-owned wealth management joint ventures with local banks’ wealth units, BlackRock, as well as units of Goldman Sachs and Barclays have found or are working to find local partners to foray into this business. AllianzGI is the latest foreign asset manager to seek a slice of China’s lucrative wealth management market.
- There are fears that whether there are enough suitable local partners for the asset managers to team up with. The competition to win over a local bank intensified this year as not many large banks are left for foreign firms to grab. AllianzGI has to hurry up.
- AllianzGI currently has 49% stake in a fund management joint venture with a unit of China Pacific Insurance. One of the sources said its plan to set up a separate wholly owned business comes after its failure to buy out the partner.
- Besides the existing fund management joint venture, Allianz’s other businesses in China include life insurance and insurance asset management which received regulatory approval in July last year.
