Transitions, Targets, Tactics China Institutional Market Sizing

Transcription

1 Transitions, Targets, Tactics China Institutional Market Sizing 2015

2 Z-BEN ADVISORS Ltd. (Hong Kong) Two Exchange Square, 39/F 8 Connaught Place, Hong Kong SAR Research Affiliate Z-BEN ADVISORS Ltd. (Shanghai, China) 哲奔投资管理咨询 ( 上海 ) 有限公司 Hongjia Tower, 25/F 388 Fushan Road Pudong New Area, Shanghai China Disclaimer The contents of this China Institutional Market Sizing report 2015: (Product hereafter) are for informational purposes only. The data contained herein is based entirely upon the available information provided in public reports by the locally operating fund managers. The contained information has been verified to the best of Z-Ben Advisors and its research affiliates ability, but neither can accept responsibility for loss arising from the decisions based upon the product. The Product does not constitute investment advice or solicitation or counsel for investment in any fund or product mentioned thereof. The Product does not constitute or form part of, and should not be construed as, any offer for sale or subscription of and fund or product included herein. Z-Ben Advisors and its research affiliate expressly disclaims any an all responsibility for any consequential loss or damage of any kind whatsoever resulting, directly or indirectly, from (a) the use of the Product, (b) reliance on any information contained herein, (c) any error, inaccuracy or omission in any such information or (d) any action resulting therefrom. Disclosure Z-Ben Advisors and its research affiliate, currently provides other products and services to some of the firms that are included in the Product. Z-Ben Advisors and its research affiliate may continue to have such dealings and may also have other ongoing business dealings with other firms provided for in the Product. Copyright The duplication of all or any part of the Product is strictly prohibited under copyright law. Any and all breaches in that law will be prosecuted. No part of the Product may be reproduced, transmitted in any form, electronic or otherwise, photocopied, stored in a retrieval system or otherwise passed on to any person or firm, in whole or in part, with out the prior written consent from Z-Ben Advisors. 1

3 Table of contents Methodology & conversion tables 5 Glossary of terms 6 Executive summary Institutional wealth drivers and opportunities 7 SWFs: Past, present and future 8 Pensions 9 to make a concerted move offshore 10 Total market sizing Onshore addressable institutional Offshore addressable institutional Overview of mandate prospects 13 SWFs An introduction 15 CIC: An introduction 16 CIC: Organizational structure 17 CIC: Leadership structure 18 CIC: Timeline 19 CIC: Broad growth 20 CIC: Funding mechanism 21 CIC: Mandated 22 CIC: Asset allocation 23 CIC: Asset allocation by geography 24 CIC: Public equities 25 CIC: Fixed income 26 CIC: Private equity and alternatives 27 CIC Capital: A new long-term investment focus 28 CIC: SOE holdings ( ) 29 CIC: Australian property portfolio purchase case study 30 CIC: UK infrastructure acquisitions case study 31 : An introduction 32 : Timeline 33 : Organizational structure 34 : Leadership structure 35 : Broad growth 36 : Funding outlook decrease of excess (investable) reserves 37 : Funding outlook breakdown in balance of payments 38 : Acquisitions in Italy case study 39 : An introduction 41 : Timeline 42 : Broad growth and asset allocation 43 : Asset types 44 : Offshore investment process 45 : Onshore investment process 46 : Industry concentration 47 : Top-tier insurers 48 : Mid-tier insurers 49 2

4 : Insurance AMC brief 50 : Investment returns and effects 51 : Decreasing FI returns and RMB depreciation will trigger more offshore investment 52 : Insurer QDII AUM and offshore investment capability 53 : Insurer QDII competitive landscape 54 : Offshore mandates 55 : ODI 56 : China Life 57 : Anbang Group 58 : Ping An Group 59 : CPIC 60 : Taiping 61 : Sunshine Group 62 : Taikang 63 Pension Pension introduction 65 Pension reform: Desperately needed 66 Pension reform: Investment management reform 67 PPF: An introduction 68 PPF: Structure 69 PPF: Timeline 70 PPF: Broad growth 71 PPF: Provincial pension AUM and externally-mandated 72 PPF: Funding outlook 73 PPF: Asset allocation 74 : An introduction 75 : Organizational structure 76 : Leadership structure 77 : Timeline 78 : Funding overview 79 NSSF: Funding sources 80 NSSF: Mandated 81 : Onshore and offshore mandates 82 : Onshore and offshore mandate managers 83 : Asset allocation 84 : Mandates and fees 85 : Guangdong province case study 86 : An introduction 87 : Timeline 88 : Structure 89 : Broad growth 90 : Mandate managers 91 : Asset allocation by product type 92 : Reform on the horizon 93 : Occupation annuity, an -like newcomer 94 3

5 Other Institutions Other institutions: An introduction 96 Other institutions: Banks as institutional investors 97 Other institutions: China Development Bank (CDB) broad growth 98 Other institutions: China Development Bank (CDB) structure 99 Other institutions: China-Africa Development fund (CAD) 100 Other institutions: AIIB introduction 101 Other institutions: AIIB likely investment mandate format 102 Other institutions: Group finance companies (GFCs) 103 Other Institutions Business development: An onshore presence is key to success 105 Business development: Institutional opportunities 106 Business development: Comparing onshore platforms 107 Business development: WFOE offers a wide range of possible businesses 108 Business development: WFOE and JV regulatory timeline 109 Business development: How to target institutional money 110 Business development: Targeting institutional money from offshore 111 Appendix Appendix I: Total institutional market sizing and mandate projections 113 Appendix II: CIC market sizing 116 Appendix III: market sizing 117 Appendix IV: Insurance companies 118 Appendix V: Onshore insurance AMCs 123 Appendix VI: Offshore insurance AMCs 124 Appendix VII: Insurance regulations - investment scope 125 Appendix VIII: Insurance regulations mandates 126 Appendix IX: domestic mandate managers 127 Appendix X: foreign mandate managers 128 Appendix XI: investment managers 129 Appendix XII: Local pensions 130 Appendix XIII: JV foreign stake requirement update 131 4

6 Introduction SWFs Business Pensions Other institutions Appendix development Onshore addressable institutional 2014/2020 USD3.1tr 2014 AUM USD10.8tr USD0.5tr USD4.9tr USD1.6tr USD0.2tr 2014 onshore mandate total USD240bn USD96bn USD124bn Moving into 2020, total onshore addressable will increase markedly from USD240bn to USD1.2tr. Z-Ben Advisors believes that competition between domestic firms will remain relatively unchanged. However, the presence of foreign managers onshore may transform segments previously insulated from competition. These disrupters are likely to create opportunities in mixed currency, crossborder, fixed income and alts products. 2020e AUM USD18.0tr USD18bn USD9.5tr 2020e onshore mandate total USD1.2tr USD3.4tr USD0.8tr USD1.1tr Source: Z-Ben Advisors USD0.6tr USD2.3tr CIC Capital USD423bn USD563bn USD204bn USD48bn Mandate size not to scale relative to AUM size 5

7 Introduction SWFs Business Pensions Other institutions Appendix development Offshore addressable institutional 2014/2020 USD3.1tr 2014 AUM USD10.8tr USD0.5tr USD4.9tr USD1.6tr USD0.2tr 2014 offshore mandate total USD410bn USD154bn USD230bn Offshore addressable will not increase greatly by 2020, but the composition of where institutional opportunities lie, namely mandates, will shift. Macroeconomic policy will continue to have an impact on these opportunities, and they are likely to change based on policy dynamics. As a result, Z-Ben Advisors will revise these figures on an annual basis. 2020e AUM USD18.0tr USD27bn USD9.5tr 2020e offshore mandate total USD490bn USD3.4tr USD0.8tr USD1.1tr USD0.6tr USD2.3tr CIC Capital USD112bn USD204bn USD100bn USD68bn USD8bn Source: Z-Ben Advisors Mandate size not to scale relative to AUM size 6