Russell Investments signs landmark agreement with China AMC
- Chinese asset management industry sees growth trajectory, including multi-asset solutions
- New regulations allow creation of fund-of-funds solutions as more investors seek global solutions
Under terms of the agreement, Russell Investments will provide advice to China AMC on the design of their domestic fund-of-fund investment products, including guidance on factor exposures and diversification techniques. In return, China AMC will promote Russell Investments’ global multi-asset and sector solutions to its institutional client base, many of whom are seeking to invest assets offshore. The agreement also sets the stage for China AMC to work with Russell Investments in order to launch a series of domestic multi-manager products.
“We feel privileged to establish this connection with China AMC, which is one of the oldest and most respected investment management firms in China,” said Peter Gunning, chief executive, Asia-Pacific for Russell Investments, who added that China AMC’s $140 billion in assets under management (AUM) ranks it as China’s leading fund management company in terms of mutual fund AUM. “This agreement is a significant step forward in terms of our multi-asset investing profile in the region among China-based institutional and high net worth clients, including pension plans, insurance companies, banks and independent fund distributors.”
Tang Xiaodong, China AMC’s CEO, said, “We have prepared for this fund-of-funds business since last year, including building our strategic asset allocation team, research platform, and relevant IT models as well as positioning our own funds in pure alpha-driven sector funds. Meanwhile, we were keen to look for a partner opportunity with global expertise, and we think it is a perfect partnership with Russell Investments in the fund-of-fund and manager-of-manager business area.”
Mr Xiaodong added that the Chinese fund management industry has experienced rapid growth in the past decade, and now there are 3,296 public mutual funds in the market, not including private funds. As a result, he continued, it is very difficult for investors to make a good selection from such a huge fund pool.
Mr Gunning added that the agreement comes at a turning point in the asset management industry in China. New regulations allow for the formal creation of licensed fund of funds products in the Chinese marketplace as the regulator focuses on improving the quality and risk profile of investment options available to Chinese retail and institutional investors.
“We believe the Chinese asset management industry is entering the next phase of its development as institutional clients become more sophisticated and the retail market matures,” said Brian Ingram, president and general manager of Russell Investments’ wholly foreign-owned enterprise in China: Russell Investment Advisors (Shanghai) Co., Ltd. “In terms of outbound investments, Chinese investors are increasingly seeking global multi-asset solutions as the local markets remain volatile and the currency devalues.”
Russell Investments, which five years ago was part of an affiliation that launched the first manager-of-manager solution in China, is uniquely positioned to serve China AMC in this regard. The firm’s global leadership in manager research (which includes monitoring more than 9,300 investments products), as part of overall portfolio management, remains a highly recognized and valued core capability in China. Overall, the firm provides multi-asset, multi-manager advisory solutions to both Chinese institutional clients and foreign investors seeking exposure to onshore Chinese equities (A-shares) and fixed-income securities.
“Chinese institutional investors face challenges in selecting funds, while the industry must manage greater regulatory pressure aimed at protecting investors,” Mr Ingram said. “As the provider of fund-of-fund solutions we will need to be nimble and able to quickly adapt to changing circumstances in today’s volatile markets in order to successfully serve our special new partner and their clients.”
About Russell Investments
Russell Investments, a global asset manager, is one of only a few firms that offers actively managed multi-asset portfolios and services that include advice, investments and implementation. Russell Investments stands with institutional investors, financial advisers and individuals working with their advisers—using the firm’s core capabilities that extend across capital market insights, manager research, asset allocation, portfolio implementation and factor exposures—to help each achieve their desired investment outcomes.
Russell Investments has more than AUD$327 billion in assets under management (as of 30/9/2016) and works with more than 2,500 institutional clients, independent distribution partners and individual investors globally. As a consultant to some of the largest pools of capital in the world, Russell Investments has more than US$2.3 trillion in assets under advisement (as of 12/31/2015). The firm has four decades of experience researching and selecting investment managers and meets annually with more than 2,200 managers around the world. Russell Investments also traded more than US$2 trillion in 2015 through its implementation services business.
Headquartered in Seattle, Washington, Russell Investments operates globally, including through its offices in Seattle, New York, London, Paris, Amsterdam, Milan, Dubai, Sydney, Melbourne, Auckland, Seoul, Tokyo, Shanghai, Beijing, Toronto, Chicago and Milwaukee. For more information about how Russell Investments helps to improve financial security for people, visit russellinvestments.com/au
About China Asset Management Co., Ltd.
China AMC, a leading asset manager in China with an 18-year-history, serves over 300 separate mandates for institutional investors and 30.5 million retail investors, and the total AUM stands at USD$148 billion, as at December 31, 2015.