China's Top 20 Money Managers
When Beijing authorized domestic banks and insurance companies to set up mutual fund companies late last year, the authorities hoped to invigorate the country's capital markets and encourage citizens, who keep most of an estimated $1.6 trillion in savings in low-yield bank accounts, to diversify their investments.
Talk about wish fulfillment. One bank after another has entered the fray, often with a foreign partner, combining the banks' sheer distribution power with foreign fund management expertise.
In recognition of this sizzling business, Institutional Investor is introducing its first ranking of leading Chinese fund managers. The top 20 firms on our roster had assets under management of $38 billion at the end of last year. Leading the pack in II's new ranking is Shenzhen-based China Southern Fund Management Co., which saw its assets increase to $6.1 billion at the end of 2004 from $3.5 billion a year earlier. The firm manages six open-end funds with combined assets of $5.9 billion at the end of June and four closed-end funds with $710 million in assets. China Southern owes its success to cutting-edge product development, says Peter Alexander, founder and principal of Z-Ben Advisors. "It comes to market with new and unique product offerings ahead of competitors," he says. For example, the firm's $193 million Southern Active Allocation Fund, launched in October 2004, was the first listed open-end fund. For all the innovation, though, fully 70 percent of the firm's assets are in the Southern Money Market Fund, which was launched in March 2004.
Institutional Investor's inaugural ranking of China's biggest institutional investors identifies the top 20 fund managers. New York–based Senior Associate Editor Tucker Ewing, with the assistance of Researcher Winston Chan in Hong Kong, compiled the ranking from a variety of sources, including questionnaires filled out by the institutions themselves. II refined this data through follow-up faxes, e-mails and telephone calls. When official data were unavailable, II obtained figures from Web sites and other public sources. All figures are in millions of dollars and are as of December 31, 2004, unless otherwise noted. Figures were converted to dollars using year-end 2004 exchange rates. (Not included in the ranking is China's National Council for Social Security Fund, with year-end 2004 assets of $20.7 billion; it is not a fund manager. However, some of its assets are included in the totals reported by individual firms that manage Social Security portfolios.)