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Fierce competition to retain managers in China

Added 26th February 2015

Strong growth in China's $3.9trn asset management industry has resulted in heated competition and challenges in retaining investment talent, according to Cerulli Associates.

Fierce competition to retain managers in China

The total size of wealth management products reached RMB 24.4trn ($3.9trn) in 2014, Cerulli said.

That includes products managed by state-owned banks (RMB 12.7trn), fund management company subsidiaries (RMB 3.7trn), and securities houses (RMB 8trn). 

Despite the size of these assets, industry reports show that a total of 213 investment managers left the mutual fund industry in China in 2014, compared with 137 in 2013 and 110 in 2012. 

The burden on individual managers has also grown significantly and an industry-wide talent shortage is already evident.

Data from Morningstar in early 2015 showed that more than 45 managers in China were managing five or more funds (include co-managing) at the same time. 

“Part of the reason for this is that there has been a steady migration of seasoned portfolio managers to private fund companies [from state-owned banks], where remuneration is much more attractive for them while investment activities are subject to fewer restrictions and less monitoring from the regulators,” Cerulli report said.

“With multiple outlets for existing investment specialists opening up and strong growth in the asset management industry in China, there is a significant supply-demand disequilibrium in the industry in terms of investment talent.”

There is also a sharp decline in the average industry experience of retail mutual fund managers in China. 

Out of 53 fund manager appointment notices in November last year, 22 had no prior experience in managing a retail mutual fund.


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