Ping An Insurance (Group) Co., China’s largest insurer by market value, is tapping growing global demand for Chinese assets to expand its offshore asset management business as competition with foreign entrants intensifies.
The overseas asset management arm aims to increase client assets for inbound and outbound investments to $100 billion in three to five years, said Chi Kit Chai, head of capital markets and chief investment officer at Ping An Asset Management (Hong Kong). He declined to disclose the current size of the business, which excludes Chinese clients’ onshore money.
“China stands out in this zero-rate world,” he said in an interview from Hong Kong. While the unit’s long-term focus has been helping Ping An’s onshore clients invest globally, “now we also want to bring international clients into China.”
Asset managers around the world are seeking growth from China as the nation opens its markets wider to global firms. Investors are also attracted by higher yields and the nation’s relatively fast recovery from the pandemic. Ping An is also leveraging the conglomerate’s operations from banking to insurance and technology to source “quality deals” few competitors have the ability to, Chai said.
“Everybody needs to up the game” as China’s market opening intensifies competition, he said. “At this point, entrenched players have the advantage.”
The $100 billion will come from both offshore clients’ investments into China, and Chinese clients’ increasing overseas allocations, Chai said. The target will mostly be met with assets from clients outside Ping An Group, while funds from the group’s insurance units will constitute a smaller part.
Ping An has long been China’s second-largest player in both life and property insurance. It’s been cross-selling products among its various business lines from financial services to technology platforms, to its corporate and more than 200 million retail clients, providing an edge over smaller rivals. Asset management contributed about 8% of first-half operating profit, behind insurance and banking operations.
Ping An this month launched its first UCITS umbrella fund in Europe to tap demand on the continent in Chinese assets. The fund will invest in strategies from selecting China stocks with artificial intelligence, to green bonds and high-yield corporate debt.
Besides stocks, global investor interest has been growing in China’s fixed-income and alternative assets including real estate and private equity, he said.
Photograph: Signage for Ping An Insurance Group Co. is displayed atop a building in Beijing, China, on Thursday, March 14, 2019. Photo credit: Giulia Marchi/Bloomberg.
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