UBS Asset Management has been ranked as the top manager with the best China strategy, according to an inaugural report published by data intelligence provider Broadridge Financial.
The top 10 list also includes other asset management giants, such as JP Morgan Asset Management, Blackrock and Invesco.
The scores are based on six different criteria: China AUM size, which accounts for 20% of the score; the extent of business scope, local operational strength and retail brand perception (55%); and global investment strength and “China as a strategic priority” (25%).
In terms of China AUM size, this includes funds domiciled outside China that invests in the mainland market (through the different inbound investment schemes, such as the QFII, RQFII and Hong Kong-China Stock Connect), onshore Chinese assets managed by the firms’ joint ventures, as well as the Chinese assets that is invested overseas, according to the report.
The firm was not able to provide actual AUM figures, however. Yoon Ng, director of Asia-Pacific insights at Broadridge, also noted that the AUM score does not include assets managed by the firms’ wholly-foreign owned enterprise private fund management (WFOE PFM) entities, given that PFM data is “unavailable or limited”. Foreign PFMs manage onshore assets on behalf of Chinese qualified investors, which only include institutions and high net worth individuals.
“One of our key findings was that total AUM size was not the only determining factor for success in China,” Ng told FSA.
“We also assessed the strength of the foreign managers’ local presence and operational strengths, as well as its long-term commitment to China.”
Indeed, a number of firms on Broadridge’s list have significant local operations in China. For example, UBS AM, Schroders and Blackrock are among the foreign firms that have the most number of headcount for their WFOEs alone, according to data from Shanghai-based consultancy Z-Ben Advisors.
Number of headcount and registered capital of WFOEs
| Headcount |
Registered capital ($m) |
|
| UBS AM |
32 |
30.5 |
| Fidelity |
28 |
42 |
| Schroders |
26 |
24.7 |
| Value Partners |
26 |
7.3 |
| Neuberger Berman |
25 |
2 |
| Blackrock |
24 |
12 |
| Aberdeen Standard Investments |
19 |
16 |
| APS Asset Management |
19 |
10 |
| Fullerton Fund Management |
15 |
8.5 |
| Bridgewater |
14 |
17.4 |
Source: Z-Ben Advisors
Retail branding
In addition, like UBS AM, all of the firms on Broadridge’s list have multiple China businesses, including offering Chinese products to offshore investors (such as China-focused Ucits funds) or having an on-the-ground presence by either having a joint venture and/or a WFOE.
Largest global firms having both a joint venture and a WFOE in China
| Firm name | Joint venture firm |
Foreign firm’s stake |
| Blackrock | Bank of China Investment Management |
16.50% |
| Allianz GI | CPIC Fund Management |
49% |
| JP Morgan Asset Management | China International Fund Management |
49% |
| AXA Investment Managers | Axa SPDB Investment Managers |
39% |
| Prudential Financial | Everbright Pramerica Fund Management |
45% |
| BNP Paribas Asset Management | HFT Investment Management |
49% |
| UBS Asset Management | UBS SDIC Fund Management |
49% |
| DWS | Harvest Fund Management |
30% |
| Invesco | Invesco Great Wall Fund Management |
49% |
| Morgan Stanley | Morgan Stanley Huaxin Fund Management |
37.40% |
| Prudential (Eastspring Investments) | Citic-Prudential Fund Management |
49% |
| Franklin Templeton | Franklin Templeton Sealand Fund Management |
49% |
| Manulife Asset Management | Manulife Teda Fund Management |
49% |
| Schroders | Bocom Schroders |
30% |
| Credit Suisse | ICBC Credit Suisse |
20% |
Source: Z-Ben Advisors
However, what sets UBS AM and JP Morgan Global AM apart from their peers is their high retail brand perception in China score, according to the Broadridge report.
“In China, many bank-backed foreign managers have leveraged the profile of their global parents, with UBS AM and JP Global AM being widely recognised among the retail investors surveyed,” Ng said.
She noted, however, that Blackrock, which is a not backed by a bank, also scored high on brand recognition.
“As an independent manager, it was able to rely on its own profile and existing Asia operational strengths for engaging with retail investors in China.”
This is the third time that UBS AM has been rated as the top foreign firm in terms of their China strategy by a third-party data or asset management consultancy provider.
UBS AM also came in as the top foreign firm on Z-Ben’s list for the second time this year. The firm was ranked number one for the first time last year since the Z-Ben started publishing the rankings in 2016.
