The Rise Of China’s Institutional Asset Managers
For the purposes of this report, we define China’s institutional asset managers as the insurance asset management companies and pension fund management companies that mainly manage institutional money. In our Top 30 list, there are eight insurance asset managers and one pension management company.
There are three main reasons that these institutional asset managers are worthy of the attention of global investors and asset managers:
• Sustained fast growth
Younger than FMCs (the first insurance asset managers were established in 2003, five years after the launch of the first FMC), institutional asset managers have enjoyed faster growth rates, driven by demand from the rapidly growing insurance funds and pension funds (see figure 8), neither of which have shown any sign of slowing growth. The 10%+ annual growth in capital available to these institutional asset managers looks to be sustainable over the coming years.
• Each player is relatively large in size
There are currently 28 insurance asset managers and nine pension management companies active in China.[1] The relatively small number of players means each individual firm is sizeable – and therefore a worthy counterpart for business discussion and transactions.
• Increasingly market-oriented
In their early years, insurance asset managers acted as in-house managers for their insurance group parents. However, recent years have seen them moving to the market, competing for investment capital from other institutional investors.
Today, roughly 30% of their AUMs are from other parties.[2] These firms are also becoming important allocators to other managers, including global managers, for asset classes and markets that they do not have strength in.
Figure 9 shows the asset allocations by the institutional asset managers, according to a survey published by the Insurance Asset Management Association of China (IAMAC) in 2020. Institutional asset managers have substantial expertise in bond and private debt investment, but more limited experience in equities and overseas markets.
