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Affiliated Managers Group: An Interesting Way To Gain Exposure To China

Financial Alphas profile picture
Financial Alphas


  • AMG’s stakes in Value Partners and Winton Capital gives it exposure to China’s hedge fund and private equity industries.
  • Both firms have entered the market, one whose industry AUM has doubled in two years and tripled in three years.
  • I see no signs of this growth slowing because of an increasingly wealthy population and capital outflow restrictions.

Over the past few years, western managers have been gaining access to China’s hedge fund and private equity industry. While some of the moves gain attention, Affiliated Managers Group (NYSE:AMG) is actually one of the best ways to gain exposure to this trend, despite not entering the market itself.

Chinese market primer

A recent report by Casey Quirk discussed how China is set to become the second-largest asset management industry in the world, after the US, with $17tr in AUM by 2030. That’s a huge potential market to tap, but non-Chinese managers are – to a large extent – restricted in how they can address this. The Chinese hedge fund and private equity industries are fully open to overseas managers, and some have entered the market at full speed, having already launched fund products and raised capital.

It makes a lot of sense to get into the market early; there has been huge growth in industry AUM over the past few years as China’s wealthy look for new sources of alpha. The private investment industry AUM (hedge fund, private equity, venture capital and others) is just short of $2tr as of June 2018. That’s large, but is put into perspective by seeing that it was $1tr in June 2016; the industry has doubled in just 26 months, and tripled in three years. That’s staggering growth and should be the target of all overseas asset managers.

ChinaChina’s private investment industry AUM growth. Units: USD billions. Source: Asset management association of China.

How AMG has a stake in this move

AMG isn’t entering the Chinese market. However, its affiliates are. The most important stake is the holding in Hong Kong-based Value Partners (OTCPK:VPGLF). Of the dozen or so foreign managers that have launched a hedge fund product in China, Value Partners was

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Financial Alphas profile picture
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Comments (2)

Great Swami profile picture
Ignore the fact that China remains a Communist Country at your peril
Fools rush in
Financial Alphas profile picture
China is one of the biggest untapped opportunities for asset managers. I'm glad to AMG with a foot in the race.
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