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Asset Management In China: Expect Growth

Jul. 11, 2018 12:20 PM ET
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A new study by Casey Quirk looks at asset management in China. It makes a bold claim: that by 2030, asset management strategies broadly defined will account for 10% of total Chinese wealth. That will be a more than doubling of the corresponding number at present: 4%.

If China gets to 10% by 2030 it will be at a place “roughly comparable to where the US stood in 1990.”

In absolute numbers, this will mean that China in 2030 will have $17 trillion in managed assets, which will make it the second largest nation-state market for such managerial services. Casey Quirk expects that the US will remain #1 in this respect, but its numbers suggest that China will overtake the current #2, the United Kingdom.

The wealth managed will belong more to individuals than to institutions.

For the purposes of this paper, the term “asset management” is defined quite broadly to include mutual fund managers, private listed-securities investment firms; private equity investment firms; insurance asset management firms; segregated account managers; and pension fund managers.

Let’s Get More Granular

Casey Quirk expects that rates of growth in China will average 15% per year through 2025, but that they will then moderate to 12% per year for 2025 to 2030. “Put another way,” the authors of the report say, “China will account for about the same amount of net new flows as all other global markets between today and 2030.”

Those authors are: Daniel Celeghin, Natalie Wong, Kenneth Tam, and Luli Xing, all of the Hong Kong office.

[Two years ago Deloitte acquired CQ, although it continues to operate as an autonomous entity under the Deloitte corporate tent.]

Five Winning Models

So: how can an asset manager successfully play China’s growth?

Casey Quirk suggests that there are five “winning” models from which one can

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