U.S. money management firms are underrepresented in the push to grab a piece of China's asset management market.
That market gradually is getting more crowded — more with European firms than American ones — now that the Chinese investment management industry has taken steps toward maturation.
"It's a complicated market that is developing very quickly," said Chiang Hsien, chief executive officer of Guotai Junan Allianz Fund Management Co. Ltd., Shanghai, the first joint venture fund management company formed in China back in 2002. "And if you're not here now, it could be very difficult to directly take part in the future growth."
A joint venture is the only way for a foreign money manager to establish operations in China and manage Chinese assets. At press time, there were 23 joint-venture fund management companies, three-quarters of which were with European financial institutions, according to the China Securities Regulatory Commission, Beijing.
Six U.S.-based companies have access to China through joint ventures. They are: Lord, Abbett & Co.; JPMorgan Asset Management; AIG Global Investment Group; Principal Financial Group; Prudential Investment Management Inc.; and BlackRock Inc.
BlackRock gained its access when it acquired Merrill Lynch Investment Managers, which had a joint venture partnership with the Bank of China.
Some U.S. money management giants, such as Fidelity Investments, Legg Mason Inc., State Street Global Advisors and Mellon Financial Corp., are notably absent from the joint venture marketplace, even though officials at each have said Asia is a strategic marketplace for future growth.