AMP Capital breaks into China funds management market

AMP Capital plans to establish a funds management company in China in partnership with China Life Asset Management Company, a subsidiary of China's largest insurance group, institutional investor and corporate pension manager, China Life Insurance.

AMP Capital will hold a 15 per cent share in the newly formed China Life AMP Asset Management Company Limited which will deliver domestic listed equities and fixed income to retail and institutional investors in China.

The pair are the first to take advantage of new regulations introduced to China in June this year which allow Chinese insurance companies to establish funds management companies that offer public mutual funds to retail and institutional investors. The joint venture has received approval from the China Insurance Regulatory Commission and is awaiting regulatory approval from the China Securities Regulatory Commission.

The reforms are expected to drive new distribution channels and innovative product solutions.  

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Funds management companies can expect to benefit from rapid growth in China's wealth management industry, AMP Capital said, with the mutual fund industry expecting to reach A$0.8 trillion in 2013 and $1.5 trillion by 2017 off the back of 15 per cent per annum growth rates.

AMP chief executive Craig Dunn said the business was focused on international expansion through its funds management arm, AMP Capital.

"The funds management joint venture represents the commercialisation of our Memorandum of Understanding (MOU) with China Life and is the ideal balance of our mutual strengths and capabilities," Dunn said.

AMP has had a presence in China since 1997, whilst AMP and China Life have had a formal relationship for almost eight years. In 2006, the two companies cooperated in Qualified Foreign Institutional Investors (QFII) investments and then entered a MOU for strategic cooperation in late 2009, covering partnerships in funds management and pensions.

Last month, AMP Capital cited the importance to Australia of markets in China and Japan following the appointment of a new head of Asian fixed income located in Hong Kong.