A new door into China's institutional market is about to open for foreign money managers, which could create opportunities for U.S. firms to manage assets in the world's most populated country.
China's National Council for Social Security Fund, Beijing, is close to announcing the hiring of several global managers that will run a combined $500 million to $1 billion, a small portion of the fund's $29 billion in retirement assets. It'll be the first time the NCSSF will use non-Chinese firms. These managers are expected to run a mix of international equity and fixed-income portfolios.
According to sources in the Chinese fund management industry, among the firms expected to be hired are UBS Global Asset Management, Barclays Global Investors, State Street Global Advisors, Morgan Stanley Investment Management, Goldman Sachs Asset Management, Wellington Management Co. and INVESCO. The fund will likely hire nine managers, added one source, who said that portfolio sizes have not yet finalized. All sources asked not to be identified.
These sources said finalists will be named shortly, but the firms are still in the process of negotiating contracts with the NCSSF and Chinese regulators.
Officials at the firms wouldn't confirm they are in final negotiations with the NCSSF.
More than 100 investment management firms applied to manage assets for the NCSSF when it announced a search last spring, and the NCSSF narrowed down the list to 25 during the summer, according to sources in the Chinese fund industry.
"When you see this many large money managers pursuing such a small dollar amount, it tells you something about how eager firms are to get into this market," said a money manager based in Beijing, who asked not to be identified.