China may have escaped the global economic slowdown so far, but Chinese asset managers are feeling the pain. A weak domestic stock market and a steady supply of equities from Chinese companies and the government have put pressure on the country’s fund management industry, according to Institutional Investor magazine.
It’s a sign of the times that China Asset Management Co. retains its status as the country’s largest money manager despite a decline in assets under management. The company stands at the top of the China 20, Institutional Investor’s exclusive industry ranking, for a fourth consecutive year, even though its assets slipped to $43.5 billion at the end of March from $45 billion at the end of December 2009.Harvest Fund Management Co. ranks second, with $38.6 billion in assets, up from $35.1 billion at the end of 2009; Bosera Asset Management Co. is third, with $28.7 billion in assets, down from $30.7 billion; E Fund ¬Management Co. returns in fourth place despite a sharp fall in assets, to $22.3 billion from $27.9 billion; and China Southern Fund Management Co. advances one place, to fifth, in spite of a modest decline in assets, to $17.6 billion from $17.9 billion.
“The major challenge for us was market volatility and the fact that it has been a bear market,” says Beijing-¬based Zhang Houqi, deputy president of China Asset Management Co. China’s benchmark CSI 300 index has been weakening steadily since April and stood at 2,679.27 late last month, down 14.4 percent since the start of the year and off a whopping 54.5 percent from the all-time high in October 2007.
The Chinese government has been selling its stakes in a wide range of companies, flooding the market with billions of shares since 2006, says China AMC’s Zhang. The government isn’t the only source of supply. Chinese companies continue to bring a steady flow of initial public offerings to the market, albeit not at the same torrid pace as in previous years. Year-to-date as of September 21, 267 companies had issued $41.7 billion worth of equity in IPOs.
How the Ranking Was CompiledInstitutional Investor’s seventh annual ranking identifies China’s top 20 fund managers by assets. New York–based Senior Editor Jane B. Kenney, with the assistance of Researcher Joe Lam 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 e-mails and telephone calls. When official data were unavailable, II obtained figures from websites and other public sources. Figures for 2011 are as of March 31, and those for 2010 are as of December 31, 2009; where necessary, values were converted from yuan to dollars using exchange rates on those dates.