Posted inNews

Amundi China wealth JV aims $70bn AUM by 2025

For Asia as a whole, the firm has set an AUM objective of €500bn ($582.75bn).
Side view of young businesswoman climbing stairs to success on concrete wall background. Leadership and career development concept

Amundi’s wealth management joint venture with BOC Wealth Management, Huihua Wealth Management, is set to start up its operations by the fourth quarter, according to the French firm’s third quarterly report.

The joint venture received its final approval to set up from the China Banking Insurance Regulatory Commission (CBIRC) in September, and the teams and infrastructure are in place, the firm said.

The JV expects to launch its first products by the end of the year, which will be primarily distributed under Bank of China’s (BOC) network. BOC is the fourth largest bank in the mainland, with 300 million retail clients and 11,000 branches, according to the report.

Amundi expects that the JV should break even financially by the end of 2021.  The JV also aims its AUM to reach €60bn ($69.9bn), with at least €50m in net income by 2025.

Huihua Wealth is 55% owned by Amundi and 45% owned by BOC WM. It is also the first joint-venture company under the CBIRC-regulated wealth management framework introduced last year that has a foreign shareholder holding a majority stake.

In August, the CBIRC also gave the go-ahead for Blackrock and Temasek to form a wealth management JV with China Construction Bank. It was also reported recently that Julius Baer has plans to establish a majority-owned JV in China. If successful, it will be the first major private bank to set up a wealth management joint venture in the mainland.

The €500bn target

For Asia as a whole, Amundi aims to increase its AUM by around 66% to reach €500bn by 2025, according to the report.

As of the end of September, assets in Asia reached €303bn, which is a 35.1% increase from € 225bn in September last year. The region also saw positive inflows of € 8.6bn during the third quarter, it added.

Asia accounts for nearly 20% of the firm’s total AUM of $1.66trn and 39% of the total excluding France, where the firm is headquartered.

Source: Amundi. Click to enlarge.

“Asia is a major focus of Amundi’s expansion strategy. In the space of five years, Amundi’s Asian AUM tripled,” Yves Perrier, the firm’s CEO, said in the report.

Amundi’s AUM growth in Asia

Source: Amundi

The firm explained that it has benefitted for years with a pragmatic strategy that combines two approaches: joint ventures with major retail banks and wholly-owned subsidiaries.

The largest contributor for Amundi’s Asia AUM is State Bank of India Fund Management (SBI FM), which now manages €136bn, according to the report. Amundi has a 37% in the India joint venture.

Other joint venture firms that Amundi has are NH-Amundi in South Korea (Amundi owns 30%) and ABC-CA Fund Management in China (with a 33.3% stake).

Amundi operates in other markets as well, including Hong Kong, Singapore, Taiwan, Japan, Malaysia and Thailand, according to the firm.

Part of the Mark Allen Group.